Establishes the DOE as a political subdivision headed by the board of education. Repeals the state educational facilities improvement special fund. Establishes a restructuring and transition committee to assist in the restructuring of the DOE and public educational system.

A BILL FOR AN ACT

SECTION 1. The legislature finds that there are many deficiencies in Hawaii's public educational system. Low test scores, weakening of teaching staff, and low learning expectations all point to an educational crisis in Hawaii. The State must make difficult decisions and continue the educational reforms initiated with Act 51, Session Laws of Hawaii 2004.

The legislature further finds that it is necessary to develop a system that provides answers to funding issues as well as accountability problems. There is a need to reform the governance of the statewide educational system by setting clear lines of authority and responsibility in all fiscal matters, policy issues, and managerial oversight.

Creating the department of education as a political subdivision will allow the department to act autonomously and to use its existing resources more efficiently and effectively. Furthermore, the department will be solely and directly accountable to the public.

The purpose of this Act is to provide the department of education with autonomy from the executive branch by:

SECTION 2. Section 26-4, Hawaii Revised Statutes, is amended to read as follows:

"§26-4 Structure of government. Under the supervision of the governor, all executive and administrative offices, departments, and instrumentalities of the state government and their respective functions, powers, and duties shall be allocated among and within the following principal departments that are hereby established:

SECTION 3. Section 37-113.1, Hawaii Revised Statutes, is amended to read as follows:

"§37-113.1 Council on revenues; estimate of total personal income. The council shall prepare an estimate of the total state personal income for the calendar year in progress and, when necessary, for the next succeeding calendar year for which such income has not been determined or published and shall report the estimate and any revision thereto to the director of finance, the governor, the chief justice, the board of education, and the legislature each August 5 and November 5."

SECTION 4. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

SECTION 5. Section 302A-1101, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) [There shall be a principal executive department to be known as the] The department of education[, which] shall be headed by an elected policy-making board to be known as the board of education. The board shall have power in accordance with law to formulate statewide educational policy, adopt student performance standards and assessment models, monitor school success, and to appoint the superintendent of education as the chief executive officer of the public school system.

Under policies established by the board, the superintendent shall administer programs of education and public instruction throughout the State, including education at the preschool, primary, and secondary school levels, adult education, school library services, health education and instruction (not including dental health treatment transferred to the department of health), and other programs as may be established by law."

SECTION 6. Section 312-2, Hawaii Revised Statutes, is amended to read as follows:

"§312-2 Powers of board; special fund. (a) The board of education may:

(b) The board shall be the trustee of the special fund and all moneys therein shall be deemed to have been appropriated to the use and for the purposes of the board in providing library services. Nothing in this section shall be construed to limit the powers and duties of the board hereinbefore expressed, or to empower the board to obligate the State financially in any sum which shall not have been appropriated by the legislature for the use of the board.

(c) Notwithstanding any law to the contrary, the board of education may establish, specify the membership number and quorum requirements for, appoint members to, and disestablish a commission in each county to be known as the library advisory commission, which shall in each case sit in an advisory capacity to the board of education on matters relating to public library services in their respective county."

SECTION 7. Section 312-2.1, Hawaii Revised Statutes, is amended to read as follows:

"§312-2.1 Appointment of state librarian; duties; salary. (a) The state librarian shall be appointed by the board of education, without regard to chapter 76, shall be under the direction of the board, shall be responsible for the operation, planning, programming, and budgeting of all community/school and public libraries within the State, and may be removed by a majority vote of its members. The state librarian may be appointed:

(b) The salary of the state librarian shall be set by the board of education at a rate no greater than $120,000 a year.

(c) The state librarian, under policies established by the board of education, shall be responsible for the administration of programs relating to public library services and transcribing services for the blind."

SECTION 8. Section 26-12, Hawaii Revised Statutes, is repealed.

["§26-12 Department of education. The department of education shall be headed by an executive board to be known as the board of education.

Under policies established by the board, the superintendent shall administer programs of education and public instruction throughout the State, including education at the preschool, primary, and secondary school levels, adult education, school library services, health education and instruction (not including dental health treatment transferred to the department of health), and such other programs as may be established by law. The state librarian, under policies established by the board of education, shall be responsible for the administration of programs relating to public library services and transcribing services for the blind.

The functions and authority heretofore exercised by the department of education (except dental health treatment transferred to the department of health), library of Hawaii, Hawaii county library, Maui county library, and the transcribing services program of the bureau of sight conservation and work with the blind, as heretofore constituted are transferred to the public library system established by this chapter.

The management contract between the board of supervisors of the county of Kauai and the Kauai public library association shall be terminated at the earliest time after November 25, 1959, permissible under the terms of the contract and the provisions of this paragraph shall constitute notice of termination, and the functions and authority heretofore exercised by the Kauai county library as heretofore constituted and the Kauai public library association over the public libraries in the county of Kauai shall thereupon be transferred to the public library system established by this chapter.

The management contracts between the trustees of the library of Hawaii and the Friends of the Library of Hawaii, and between the library of Hawaii and the Hilo library and reading room association, shall be terminated at the earliest time after November 25, 1959, permissible under the terms of the contracts, and the provisions of this paragraph shall constitute notice of termination.

Upon the termination of the contracts, the State or the counties shall not enter into any library management contracts with any private association; provided that in providing library services the board of education may enter into contracts approved by the governor for the use of lands, buildings, equipment, and facilities owned by any private association.

Notwithstanding any law to the contrary, the board of education may establish, specify the membership number and quorum requirements for, appoint members to, and disestablish a commission in each county to be known as the library advisory commission, which shall in each case sit in an advisory capacity to the board of education on matters relating to public library services in their respective county."]

SECTION 9. Section 36-32, Hawaii Revised Statutes, is repealed.

["§36-32 State educational facilities improvement special fund. (a) There is created in the treasury of the State the state educational facilities improvement special fund, into which shall be deposited a portion of all general excise tax revenues collected by the department of taxation under section 237-31. The special fund shall be used solely to plan, design, acquire lands for and to construct public school facilities and to provide equipment and technology infrastructure to improve public schools and other facilities under the jurisdiction of the department of education, except public libraries. In addition, activities of the department of education intended to eliminate the gap between the facility needs of schools and available resources shall be eligible for funding from the special fund. Expenditures from the special fund shall be limited to projects authorized by the legislature and shall be subject to sections 37-31, and 37-33 through 37-40. Appropriations or authorizations from the special fund shall be expended by the comptroller.

(b) The department of accounting and general services shall submit an annual report to the legislature, which shall include a financial statement of the special fund and the status of projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session."]

SECTION 10. On the effective date of this Act, the comptroller shall transfer to the credit of the state general fund all unexpended or unencumbered balances remaining in the state educational facilities improvement special fund.

SECTION 11. The legislature recognizes that the successful implementation of school programs that bring about enhanced student outcomes requires unambiguous accountability and authority in budgeting, expenditure control, and determination of educational needs by the board of education. The legislature also recognizes that providing increased flexibility requires increased accountability. The legislature believes that consolidating and reorganizing the education programs and related supporting programs at this time of transition of the department of education to a political subdivision will bring greater efficiencies and responsiveness to the educational system. To achieve these objectives, restructuring the governance and processes of the educational system is undertaken by this Act.

The legislature intends that there be an orderly transition period, wherein the board, superintendent, and state librarian with respect to public school libraries only, begin to implement this restructuring. The interest of the State and its people requires that the transition be accomplished so as to ensure continuity and quality in educational programs. To facilitate the restructuring of the department of education, it is the intent of the legislature that appropriate planning and actions be authorized and taken to avoid or minimize any disruptions to the educational system and process.

SECTION 12. (a) There is established an educational restructuring and transition committee to facilitate the restructuring of the department of education and the public educational system. The committee shall be comprised of eleven members to consist of the following:

Any vacancy shall be filled by the respective appointing authority. Appointments shall be exempt from section 26-34, Hawaii Revised Statutes.

(b) The committee shall review the structure of the department and make recommendations to the board of education and the legislature on the implementation and transition in governance of the educational system as provided in this Act. Such related functions, programs, and issues as public/school libraries, school health services, administration, personnel and personnel costs, facilities repair and maintenance, risk management, retirement, health insurance, and collective bargaining, among others, shall be addressed. To facilitate the implementation of this Act, the committee shall:

(c) The committee members shall serve without compensation, but shall be reimbursed for expenses, including travel expenses, necessary to perform their duties.

(d) The committee shall submit to the governor, the legislature, and the board of education a report and an evaluation of the structure and organization of the department of education, and recommended changes. The report shall include proposed legislation to implement the restructuring, reorganization, objectives, and policies of this Act, and shall be submitted not less than twenty days prior to the convening of the regular session of 2007.

SECTION 13. The committee shall be dissolved on May 1, 2007. The functions and authority heretofore exercised by the department of education (except dental health treatment transferred to the department of health), library of Hawaii, Hawaii county library, Maui county library, and the transcribing services program of the bureau of sight conservation and work with the blind, as heretofore constituted are transferred to the public library system established by this Act.

The management contract between the board of supervisors of the county of Kauai and the Kauai public library association shall be terminated on August 31, 2005. Beginning September 1, 2005, the functions and authority heretofore exercised by the Kauai county library and the Kauai public library association over the public libraries in the county of Kauai shall be transferred to the jurisdiction of the state librarian under chapter 312, Hawaii Revised Statutes.

The management contracts between the trustees of the library of Hawaii and the Friends of the Library of Hawaii, and between the trustees of the library of Hawaii and the Hilo library and reading room association, shall be terminated on August 31, 2005.

Upon the termination of the contracts under this section, the State or the counties shall not enter into any library management contracts with any private association; provided that the board of education may enter into contracts approved by the governor for the public library system's use of lands, buildings, equipment, and facilities owned by any private association.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act, upon its approval, shall take effect upon the ratification of a constitutional amendment at the next general election that makes the department of education a political subdivision headed by the board of education.