Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Education, to which was referred H.B. No. 1747, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to grant the University of Hawaii Board of Regents (Board) increased flexibility and control to finance and manage university projects, including construction, improvement, and maintenance.

Your Committee received testimony in support of the measure from the University of Hawaii and Department of Budget and Finance.

Your Committee finds that Act 115, Session Laws of Hawaii 1998, provided the University of Hawaii with substantial flexibility in managing its resources. This measure would allow greater self-governance on the part of the University by expanding the Board's authority to borrow funds as part of the University of Hawaii's financing plan.

This measure also authorizes the Board to issue $25,000,000 in revenue bonds, a substantial sum. If defaulted upon, the State of Hawaii would ultimately be liable, which could have a negative impact on the State's credit rating and potentially increase the cost of borrowing for statewide capital improvement projects.

Your Committee has amended the measure by:

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1747, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1747, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.