SB78

SECTION 1. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Schools education special fund. (a) There is established within the state treasury a schools education special fund. The moneys in the schools education special fund shall be administered and expended by the department accordance with this section.

(b) The department may expend moneys in the schools education special fund for exigencies, without authorization by the legislature, if:

(1) Other funding sources for a particular problem or project are nonexistent or inadequate; and

(2) The department determines that use of the moneys is appropriate under the circumstances.

(1) Unexpended and unencumbered moneys transferred from other special funds established under this chapter and sections 36-32, 36-35, and 36‑36 at the end of each fiscal year; provided that the moneys shall be deposited into the schools education special fund without lapsing into the general fund and without appropriation by the legislature, notwithstanding any law to the contrary; and

(2) Such other moneys appropriated into the schools education special fund.

(d) The department shall report to the legislature no later than twenty days prior to the convening of each regular session on the receipts, expenditures, and current balance of the schools education special fund."

SECTION 2. Section 36-32, Hawaii Revised Statutes, is amended to read as follows:

"§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~~] to 37-40. Appropriations or authorizations from the special fund shall be expended by the superintendent of education.

(b) All unexpended and unencumbered moneys remaining in the special fund created under this section at the end of each fiscal year in which the moneys are appropriated or as may be otherwise eligible for lapsing by law shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund.

[~~(b)~~] (c) The department of education shall submit an annual report to the legislature that 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 3. Section 36-35, Hawaii Revised Statutes, is amended to read as follows:

"§36-35 State educational facilities repair and maintenance account. (a) There is created in the state general fund under EDN 400 (school support) the state educational facilities repair and maintenance account, into which shall be deposited legislative appropriations to the account designated for use solely to eliminate the backlog of school repair and maintenance projects, including the repair or replacement of fixtures, furnishings, and equipment, existing on June 30, 2000. Expenditures from the account shall be subject to sections 37-31 and 37-33 to 37-40. Based on the prioritization approved by the department of education as prescribed by section 302A-1505, appropriations or authorizations from the account shall be expended by the superintendent of education.

(b) The department of education shall review the existing condition of school facilities and establish specific vision plans for each school complex based on current repair and maintenance requirements and overall repair and maintenance priorities.

(1) The remaining useful life of the school facility and its major components;

(2) The adjusted life of the school facility and its major components after repair or maintenance; and

(3) The current and future repair and maintenance requirements of the school facility and its components based on established industry standards or product manufacturer recommendations;

provided that demolition of a facility or any of its components may be recommended if the cost of the repairs do not justify the adjusted life or remaining life of the facility.

(d) Criteria used to establish overall repair and maintenance requirements may include:

(1) Whether a school facility will continue to be used for the next twenty-five years; and

(2) Whether a repair or maintenance project is required:

(A) For health or safety reasons;

(B) To comply with legal mandates;

(D) For preventive maintenance reasons;

provided that in developing criteria, consideration shall be given to school facilities that were more than twenty-five years of age on July 1, 2000.

(e) The expenditure of funds for any project with an estimated total cost of less than $100,000 shall be exempt from section 464-4; provided that:

(1) The superintendent of education shall develop internal policies and procedures for the procurement of goods, services, and construction, consistent with the goals of public accountability and public procurement practices;

(2) Insofar as is practical, and based on specifications developed, adequate and reasonable competition of no fewer than three proposals shall be solicited for each project, based on rules adopted by the superintendent of education;

(3) Considering all factors, including quality, warranty, and delivery, the award shall be made to the vendor with the most advantageous proposal;

(4) The procurement requirements shall not be artificially divided or parceled so as to avoid competitive bidding or competitive proposals; and

(5) Formal design for projects shall be done when there is a clear need to preserve structural integrity, health and safety, or to clearly communicate construction requirements.

For all projects, the superintendent of education shall develop a strategy for the efficient and cost-effective use of government and private-sector workforces and consider increased flexibility through public-private partnering, design-build options, cost plus, job order contracts, performance-based contracts, request for proposals, and any other means to improve communications and accelerate repairs while preserving the quality of the repairs.

(f) The superintendent of education shall ensure that all repair and maintenance projects achieve maximum cost-efficiency by emphasizing functional or performance criteria, uniformity of design, and commonality of products, and by avoiding unique or custom requirements that increase costs. The superintendent of education shall develop project specifications based on generic specifications or prescriptive specifications using standard commercial products. Prescriptive specifications may include a qualified product list.

For the purposes of this subsection:

"Generic specification" means a technical specification that is written in a clear, unambiguous, and nonrestrictive manner establishing:

(1) Design, performance, or functional requirements to identify the work to be performed; and

(2) Material standards to be used on a project.

"Prescriptive specification" means a technical specification:

(1) Establishing that the required work to be performed is written in a clear, unambiguous, and nonrestrictive manner; and

(2) Listing manufacturers or products that are acceptable for use on the project.

"Standard commercial product" means a product or material that in the normal course of business is customarily maintained in stock by, or readily available for marketing from a manufacturer, distributor, or dealer.

This subsection shall not apply to any school facility designated a historic property pursuant to section 6E-5.5.

(g) All unexpended and unencumbered moneys remaining in the account created under this section at the end of each fiscal year in which the moneys were appropriated or as may be otherwise eligible for lapsing by law shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund.

[~~(g)~~] (h) The superintendent of education shall submit an annual report to the legislature, which shall include a financial statement of the account and the status of repair and maintenance projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session. Expenditures for repair and maintenance projects undertaken pursuant to this section shall be posted electronically on the Internet by the department of education within thirty days of each project's completion.

[~~(h)~~] (i) This section shall be repealed on July 1, 2020."

SECTION 4. Section 36-36, Hawaii Revised Statutes, is amended to read as follows:

"§36-36 School physical plant operations and maintenance account; maintenance schedule. (a) There is created in the state general fund under EDN 400 (school support) the school physical plant operations and maintenance account, into which shall be deposited all legislative appropriations to the account.

The moneys in the account shall be used solely for school repairs and preventive maintenance projects scheduled after June 30, 2001. Expenditures from the account shall be subject to sections 37-31 and 37-33 to 37-40. Based on the prioritization approved by the department of education as prescribed by section 302A-1505, appropriations or authorizations from the account shall be expended by the superintendent of education.

(b) Every school facility newly constructed or renovated after June 30, 2001, shall include a preventive maintenance schedule prepared by the architect or engineer of the facility or the capital improvement project. The maintenance schedule shall include:

(1) A description of each major component of a facility or capital improvement project and the component's maintenance;

(2) The starting date of each maintenance project;

(3) The current, future, and any recurring cost of each maintenance project;

(4) The useful life of the facility or capital improvement project;

(5) The present value of the cost of normally scheduled maintenance over the useful life of the facility;

(6) The adjusted life of the facility or capital improvement project; and

(7) The replacement date of the facility or capital improvement project.

(c) Moneys in physical plant operations and maintenance account shall be allocated according to departmental school districts based on:

(1) Estimated preventive and scheduled maintenance costs that reflect the age and condition of existing school facilities in the State in the following categories: re-roofing, electrical, athletic facilities, re-surfacing, equipment, exterior painting, plumbing, structural integrity, termite ground treatment, termite tent treatment, interior painting, air conditioning change out, and re-carpeting; and

(2) Budgeted recurring maintenance, health and safety requirements, and legal mandates.

(d) The expenditure of funds made under this [~~Act~~] section for any project with an estimated total cost of less than $100,000 shall be exempt from section 464-4; provided that:

(2) Insofar as is practical, and based on specifications developed, adequate and reasonable competition of no fewer than three quotations shall be solicited for each project based on rules adopted by the superintendent of education;

(3) Considering all factors, including quality, warranty, and delivery, the award shall be made to the vendor with the most advantageous quotation;

(4) The procurement requirements shall not be artificially divided or parceled so as to avoid competitive bidding or competitive proposals; and

(5) Formal design for projects shall be done when there is a clear need to preserve structural integrity, health and safety, or to clearly communicate construction requirements.

(e) All unexpended and unencumbered moneys remaining in the account created under this section at the end of each fiscal year in which the moneys were appropriated or as may be otherwise eligible for lapsing by law shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund.

[~~(e)~~] (f) The superintendent of education shall submit an annual report to the legislature, which shall include a financial statement of the account and the status of school repair and preventive maintenance projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session. The department of education shall post the following reports electronically on the Internet and update them quarterly:

(1) Expenditures for school repair and preventive maintenance projects undertaken pursuant to this section, shall be posted within thirty days of each project's completion; and

(2) A list of each school's repair and maintenance needs to be undertaken."

SECTION 5. Section 302A-1504, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Funds in the account shall be expended at the direction of the school principal to contract for minor repairs and maintenance. Notwithstanding any other law to the contrary, special funds appropriated for this purpose that are unencumbered at the close of each fiscal year in the account shall not lapse until June 30 of the first fiscal year of the next fiscal biennium[.], at which time all unexpended and unencumbered moneys shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund. The department shall submit:

(1) A report to the director of finance, ninety days after the close of each fiscal year, which shall be prepared in the form prescribed by the director of finance and shall identify the total amount of funds in the account that shall carry over to the next fiscal year; and

(2) A copy of this report to the legislature at least twenty days prior to the convening of each regular session of the legislature."

SECTION 6. Section 302A-1504.5, Hawaii Revised Statutes, is amended to read as follows:

"§302A-1504.5 School-level minor repairs and maintenance special fund. (a) There is established within the state treasury a special fund to be known as the school-level minor repairs and maintenance special fund, into which shall be deposited all moneys collected pursuant to section 235-102.5(b), and any other moneys received by the department in the form of grants and donations for school-level minor repairs and maintenance. The special fund shall be administered by the department and used to fund school-level minor repairs and maintenance.

(b) All unexpended and unencumbered moneys remaining in the special fund established under this section at the end of each fiscal year in which the moneys are appropriated or as may be otherwise eligible for lapsing by law shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund."

SECTION 7. Section 302A-1508, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1508[]] Education design and construction project assessment fund. (a) There shall be established in the department a revolving fund to be known as the education design and construction project assessment fund for the purpose of defraying the costs of:

(1) Carrying out construction projects managed by the department;

(2) Managing funds representing accumulated vacation and sick leave credits and retirement benefits for non-general fund employees in the construction program in accordance with section 78-23;

(3) Equitably collecting and distributing moneys for other current expenses associated with capital improvement, repairs and maintenance, and repairs and alterations projects; and

(4) Managing payments for employee transportation requirements such as car mileage reimbursements in accordance with applicable law and collective bargaining agreements.

(b) The superintendent shall assess construction projects managed by the department based on the superintendent's evaluation of the costs of services for capital improvements, repairs and maintenance, and repairs and alterations projects. All assessments collected shall be deposited into the education design and construction project assessment fund.

(c) All expenditures from the education design and construction project assessment fund shall be made by the superintendent in accordance with applicable law and rules.

(d) All unexpended and unencumbered moneys remaining in the fund established under this section at the end of each fiscal year in which the moneys are appropriated or as may be otherwise eligible for lapsing by law shall be transferred to the schools education special fund under section 302A- without lapsing into the general fund."

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, for start-up moneys to be deposited into the schools education special fund created under this Act.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	78
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII