Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Higher Education, to which was referred S.B. No. 905 entitled:

begs leave to report as follows:

The purpose of this measure is to consolidate fifteen existing special and revolving funds into four new special funds and modify another.

The University of Hawaii testified in support of this measure.

The University of Hawaii has over forty special and revolving funds systemwide. This measure repeals fifteen of those funds and transfers the balance into five special funds. The five special fund accounts will then continue to receive revenue from the originating purposes. The University further stated that this measure supports certain recommendations made by the Auditor in her 2004 report, "Review of Revolving Funds, Trust Funds, and Trust Accounts of the Department of the Attorney General, the Department of Business, Economic Development and Tourism, and the University of Hawaii."

Your Committee expressed concern that programs previously benefiting from the revenue generated will not have access to their funds under the new consolidated special fund account. In response, University officials stated that internal accounts will be maintained to identify revenue attributed to specific programs. The University believes that consolidation of these individual accounts will lead to increased efficiency and lower the administrative cost of managing multiple special and revolving funds.

As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 905 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.