SB1136

PART I

SECTION 1. The legislature finds that pursuant to Act 51, Session Laws of Hawaii 2004, as amended by Act 222, Session Laws of Hawaii 2004 (Act 51, as amended), the weighted student formula was established to provide more equity in funding for public schools through the use of weighted characteristics affecting the relative cost of educating each student attending a public school. Act 51, as amended, also established the committee on weights to develop a weighted student formula based upon student characteristics, assign specific weights for the characteristics, identify what funds are included in the weighted student formula allocation, and perform any other functions necessary for the implementation of the weighted student formula.

After the committee on weights I made its recommendations to the board of education and a weighted student formula was established in 2005, it became clear that many small and rural schools would be severely and adversely affected upon full implementation. Therefore, it became necessary for the legislature to appropriate additional funds to the public schools to off-set monetary deficits resulting from the transition to the weighted student formula. Section 2 of Act 51, as amended, authorized supplementary allocations for this type of assistance.

Subsequently, in 2006, the committee on weights II made recommendations that also identified continuing adverse impacts on certain schools. Included within the committee on weights II's recommendation was the recommendation that a foundation allocation be established for all schools that enable a quality of schooling for all students. Currently, it is unclear how the board of education will address the issue.

The legislature continues to support and is committed to the objectives and goals of Act 51, as amended, but is mindful that the implementation of the weighted student formula must continue to be refined to appropriately address the needs of all schools, big and small, equitably. As great care was taken to evaluate, develop, and implement the weighted student formula approach, equal care and consideration must be invested in fashioning an improved method for providing appropriate funding to the schools. However, until such a method can be perfected, interim measures must be taken to ensure the immediate proper funding of public schools in Hawaii.

The legislature further finds that the schools that appear to suffer the most under the weighted student formula fall into certain categories, such as smaller student enrollment, isolated schools, schools that do not qualify for economically disadvantaged program funding, or a combination of these. Therefore, although these characteristics may already be taken into consideration under the weighted student formula, adequate funds have not been available to compensate for these disadvantages, and additional compensation based on these factors may also be necessary to avoid certain schools suffering devastating consequences.

The legislature believes schools in these categories that suffer adverse impacts under the weighted student formula must be provided a means for positively ensuring they can and will continue to function in the immediate future. Correspondingly, however, the legislature, the department of education, the board of education, and all other stakeholders must continue to work towards evaluating, developing, and implementing a more refined permanent weighted student formula system.

The legislature is dedicated to discovering a long-term solution to the problems. The legislature further believes that furnishing a temporary solution will not only provide short-term relief to the schools, but will also provide the State with adequate time, as well as a realistic deadline, within which to act, including through the introduction of separate measures on the issue during the legislative session.

The purpose of this part is to establish the weighted student formula augmentation special fund to provide additional funding to public schools to assist in the transition to the weighted student formula and appropriate funds from various sources for that purpose.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Weighted student formula augmentation special fund. (a) There is established in the treasury of the State a weighted student formula augmentation special fund into which shall be deposited any:

(1) Appropriations from the department of education instructional support (EDN 200);

(2) Appropriations from the department of education state and district administration (EDN 300);

(3) Legislative appropriations; and

(4) Other funds,

collected for the purposes of the weighted student formula augmentation special fund.

(b) Notwithstanding any moneys received pursuant to section 302A-1303.6, moneys in the weighted student formula augmentation special fund shall be used to assist schools in transitioning to the weighted student formula. The fund shall be administered by the department, which shall create guidelines for the distribution of moneys from the special fund; provided that schools shall qualify for assistance from the weighted student formula special fund based upon the demonstration of one or more of the following:

(1) Geographic isolation;

(2) Enrollment of less than two hundred students; or

(3) The lack of students qualifying for free or reduced school lunches pursuant to section 302A-405."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Funds of the employees' retirement system created by section 88-109;

(11) Unemployment compensation fund established under section 383-121;

(12) Hawaii hurricane relief fund established under chapter 431P;

(13) Hawaii health systems corporation special funds;

(14) Tourism special fund established under section 201B‑11;

(15) Universal service fund established under chapter 269;

(16) Integrated tax information management systems special fund under section 231-3.2;

(17) Emergency and budget reserve fund under section 328L‑3;

(18) Public schools special fees and charges fund under section 302A-1130(f);

(19) Sport fish special fund under section 187A-9.5;

(20) Neurotrauma special fund under section 321H-4;

(21) Deposit beverage container deposit special fund under section 342G-104;

(22) Glass advance disposal fee special fund established by section 342G-82;

(23) Center for nursing special fund under section [[]304A‑2163[]];

(24) Passenger facility charge special fund established by section 261-5.5;

(25) Solicitation of funds for charitable purposes special fund established by section 467B-15;

(26) Land conservation fund established by section 173A-5;

(27) Court interpreting services revolving fund under section 607-1.5;

(28) Trauma system special fund under section 321-22.5;

(29) Hawaii cancer research special fund;

(30) Community health centers special fund; [~~and~~]

(31) Emergency medical services special fund[[]; and

(32) Weighted student formula augmentation special fund under section 302A- ;

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year.[]]"

SECTION 4. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Transportation use special fund established by section 261D-1;

(2) Special out-of-school time instructional program fund under section 302A-1310;

(3) School cafeteria special funds of the department of education;

(4) Special funds of the University of Hawaii;

(5) State educational facilities improvement special fund;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Funds of the employees' retirement system created by section 88-109;

(9) Unemployment compensation fund established under section 383-121;

(10) Hawaii hurricane relief fund established under chapter 431P;

(11) Convention center enterprise special fund established under section 201B-8;

(12) Hawaii health systems corporation special funds;

(13) Tourism special fund established under section 201B‑11;

(14) Universal service fund established under chapter 269;

(15) Integrated tax information management systems special fund under section 231-3.2;

(16) Emergency and budget reserve fund under section 328L‑3;

(17) Public schools special fees and charges fund under section 302A-1130(f);

(18) Sport fish special fund under section 187A-9.5;

(19) Neurotrauma special fund under section 321H-4;

(20) Center for nursing special fund under section [[]304A‑2163[]];

(21) Passenger facility charge special fund established by section 261-5.5;

(22) Court interpreting services revolving fund under section 607-1.5;

(23) Trauma system special fund under section 321-22.5;

(24) Hawaii cancer research special fund;

(25) Community health centers special fund; [~~and~~]

(26) Emergency medical services special fund[[]; and

(27) Weighted student formula augmentation special fund under section 302A- ;

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned.[]]"

SECTION 5. There is appropriated out of the department of education instructional support (EDN 200) the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, to be deposited into the weighted student formula augmentation special fund.

SECTION 6. There is appropriated out of the department of education state and district administration (EDN 300) the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, to be deposited into the weighted student formula augmentation special fund.

SECTION 7. 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, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, to be deposited into weighted student formula augmentation special fund.

SECTION 8. There is appropriated out of the weighted student formula augmentation special fund of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, for the purposes of section 2.

The sums appropriated shall be expended by the department of education for the purposes of section 2.

PART II

SECTION 9. The legislature finds that the board of education, in 2002, approved the superintendent's proposal to establish complex areas, headed by a complex area superintendent and comprised of two or more school complexes. Each school complex consists of a high school and the intermediate or middle and elementary schools that feed into it. The establishment of complex areas allows each administrator to focus on the needs of the supporting schools and school complexes to provide better supervision and support.

The legislature believes that the establishment of complex areas provides the opportunity for the more efficient management of funds and personnel among schools and school complexes contained therein. The reallocation of resources within a complex area could also prove highly cost-effective. More autonomy in the management of complex areas can yield beneficial results for the students, staff, and administrators. In particular, the proper utilization of custodial staff for school campuses that do not support a large population of students, but are located on larger acreage and in close proximity to another campus could save money, time, and resources. For these types of reasons, greater discretion for the allocation of resources should lie with the complex area superintendents.

The legislature further finds that, currently, moneys for custodial services, classroom cleaners, and minor repairs and maintenance are included in the weighted student formula. The legislature determines that to provide for increased ease of the reallocation or reassignment of these services, moneys dedicated for these services should be removed from the weighted student formula.

The purpose of this part is to:

(1) Authorize complex area superintendents to reallocate resources within the complex area to achieve greater efficiency and cost-effectiveness; and

(2) Remove moneys for custodial services, classroom workers, and minor repairs and maintenance from the weighted student formula to give complex area superintendents increased control over underutilized or inefficiently utilized resources.

SECTION 10. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:

"§302A- Complex area superintendent; authority. A complex area superintendent shall support the delivery of administrative and instructional support services within the complex area superintendent's complex area, including:

(1) Personnel, fiscal, and facilities support;

(2) Monitoring of compliance with applicable state and federal laws; and

(3) Curriculum development, student assessment, and staff development services.

A complex area superintendent may reallocate resources at the complex level among the schools within the complex area superintendent's jurisdiction when operationally efficient, cost-effective, and educationally sound, including the reallocation of moneys and positions for complex level educational officers, teachers, support staff, cafeteria workers, custodial services, classroom cleaners, and minor maintenance and repairs."

SECTION 11. Section 302A-604, Hawaii Revised Statutes, is amended to read as follows:

"§302A-604 Complex area superintendents. The superintendent of education, with the approval of the board, shall appoint complex area superintendents for schools. [~~The complex area superintendents shall supervise the delivery of administrative and instructional support services within their respective complex areas, including:~~

~~(1)~~ ~~Personnel, fiscal, and facilities support;~~

~~(2)~~ ~~Monitoring of compliance with applicable state and federal laws; and~~

~~(3)~~ ~~Curriculum development, student assessment, and staff development services.~~]"

SECTION 12. Section 302A-1303.6, Hawaii Revised Statutes, is amended to read as follows:

"§302A-1303.6 Weighted student formula. Based upon recommendations from the committee on weights, the board of education, not less than annually, shall adopt a weighted student formula for the allocation of moneys to public schools that takes into account the educational needs of each student[.]; provided that the weighted student formula shall not include moneys for custodial services, classroom cleaners, and minor repairs and maintenance. The department, upon the receipt of appropriated moneys, shall use the weighted student formula to allocate funds to public schools. Principals shall expend moneys provided to the principals' schools. This section shall only apply to charter schools for fiscal years in which the charter schools elect pursuant to section 302B-13 to receive allocations according to the weighted student formula."

PART III

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2007; provided that sections 10, 11, and 12 shall take effect upon approval; provided further that:

(1) Section 2 shall be repealed on June 30, 2009;

(2) Sections 36-27, and 36-30(a), Hawaii Revised Statutes, shall be reenacted in the form in which they read on June 29, 2007; and

(3) Any balance remaining in the weighted student formula augmentation special fund shall lapse to the credit of the general fund.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1136
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII