Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Higher Education and Labor, to which was referred S.B. No. 1402 entitled:

beg leave to report as follows:

The purpose of this measure is to prohibit fringe benefits costs from being calculated in the University of Hawaii budget.

Your Committees received testimony in support of the measure from the University of Hawaii. Your Committees received testimony in opposition to the measure by the Department of Budget and Finance.

Your Committees find that the fringe benefits for the University of Hawaii personnel should be calculated as part of its budget. The University of Hawaii testified that it could not reconcile the amount of fringe benefits charged to their budget and argued that inclusion of this amorphous amount created the incorrect perception that their budget had been increasing over time. Your Committees are concerned about the impact that inclusion of fringe benefit costs have on the University budget.

As affirmed by the records of votes, with two reservations and one nay, of the members of your Committees on Higher Education and Labor, that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1402 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.