STAND. COM. REP. NO. 776

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 456
                                        S.D. 2




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

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 456, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TUITION WAIVERS,"

begs leave to report as follows:

     The purpose of this measure is to provide tuition waivers to
students of Hawaiian ancestry to attend the University of Hawaii.

     Specifically, the measure:

     (1)  Appropriates funds to the Office of Hawaiian Affairs
          for the specific purpose of offsetting the costs
          incurred by the University of Hawaii in providing
          tuition waivers to students of Hawaiian ancestry;

     (2)  Declares that any moneys expended for the purpose of
          providing tuition waivers to students of Hawaiian
          ancestry shall be credited against the State's pro rata
          share of ceded land revenue obligation to the Office of
          Hawaiian Affairs; and

     (3)  Establishes an accounting process to effectuate the
          intent of the measure.

     Your Committee finds that under section 5(f) of the
Admission Act, the public land trust and the revenues derived
therefrom may be used for the support of public schools and other
public educational institutions.  Because the University of

 
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Hawaii is indeed a public educational institution, it is
compliant with the purpose of section 5(f) of the Admission Act.
While much of the supporting testimony received by the Committees
on Education and Technology and Water, Land, and Hawaiian Affairs
indicated that these tuition waivers should be considered as an
entitlement since the University of Hawaii at Manoa is situated
on ceded lands, your Committee does not believe that the
University is obligated to grant tuition waivers to Native
Hawaiians to fulfill the educational purpose of section 5(f) of
the Admission Act.

     However, your Committee recognizes the duty of the State to
provide increased opportunities and access to higher education
for native Hawaiians.  Your Committee finds that increased
educational opportunities would create positive role models for
young Hawaiians, and allow for greater advancement for native
Hawaiians as a whole.

     Your Committee further finds that another purpose of section
5(f) of the Admission Act is to provide for the betterment of the
conditions of native Hawaiians.  Thus, your Committee believes
that while the University is not obligated to provide tuition
waivers solely because it is located on ceded lands, the
provision of these waivers would fall under another purpose of
section 5(f) of the Admission Act.  As such, your Committee
believes that any money appropriated or allocated for the
purposes of providing tuition waivers for native Hawaiian
students should be credited against the State's pro rate share of
ceded land revenue obligations.

     Your Committee is also aware of the provisions of Article
XII, section 6, of the Constitution of the State of Hawaii which
requires the State to "...manage and administer the proceeds from
the sale or disposition of the lands, natural resources, minerals
and income derived from whatever sources for native Hawaiians and
Hawaiians, including all income and proceeds from that pro rata
portion of the trust referred to in section 4 of this article for
native Hawaiians;..." (emphasis added).  Your Committee
interprets this provision to mean that any ceded land revenues
for which the State seeks to claim credit in satisfaction of the
pro rata share of revenue obligation first would have to either
be allocated to the Office of Hawaiian Affairs prior to
disbursement for the qualifying purpose, or be mutually agreed
upon by the State and the Office of Hawaiian Affairs as a
creditable expenditure of a pro rata share of ceded land revenues
by the State.

     Your Committee believes that the funding mechanism provided
in the measure should:

 
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     (1)  Provide students of Hawaiian ancestry with the
          resources to obtain a post secondary education;

     (2)  Fulfill at least in part, the State's obligation to use
          a portion of ceded land revenues for the purposes
          stated under the Admission Act, Article XII, Section 6,
          of the State Constitution, and Chapter 10, Hawaii
          Revised Statutes; and

     (3)  Ensure that the University of Hawaii possesses the
          necessary financial resources to educate students of
          Hawaiian ancestry who receive tuition waivers.

     Your Committee has amended the measure by replacing the
blank amount appropriated with a zero dollar amount.

     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 S.B.
No. 456, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 456,
S.D. 2.

                                 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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