SB2576

SECTION 1. After the creation of the tuition and fees special fund by Act 161, Session Laws of Hawaii 1995, many University of Hawaii positions that were previously funded by the general fund instead became funded by the tuition and fees special fund. Section 87A-39, Hawaii Revised Statutes, requires the University of Hawaii to reimburse the State for contributions made by the State pursuant to sections 87A‑32, 87A‑33, 87A‑34, 87A-35, 87A-36, and 87A-37, Hawaii Revised Statutes, on account of University of Hawaii employees whose compensation is paid in whole or in part from funds other than the general fund.

In addition, section 88-125, Hawaii Revised Statutes, requires the University of Hawaii to reimburse the State for the respective amounts payable by the State to cover the liability of the State to the various funds of the employeesꞌ retirement system of the State. The department of budget and finance and the University of Hawaii have subsequently agreed that reimbursements pursuant to sections 87A‑39 and 88‑125, Hawaii Revised Statutes, will be paid by the general fund to avoid an unintended consequence that would have forced the University of Hawaii to pay for fringe benefits costs that it previously did not have to pay.

The legislature finds that, without this agreement, the University of Hawaii would have been forced to consider alternatives, such as increased tuition rates or staff reductions, which would have resulted in a reduction in services. The legislature further finds that, without this agreement, the legislature would also have had to continue providing general funds for University of Hawaii positions or implement reduction in force measures for positions that it no longer appropriated general funds for.

The legislature further finds that this cost-sharing agreement will be beneficial to both the University of Hawaii and the State.

The purpose of this Act is to provide the University of Hawaii with certain exemptions from sections 87A‑39 and 88‑125, Hawaii Revised Statutes, to codify in statute the cost‑sharing agreement between the University of Hawaii and the department of budget and finance.

SECTION 2. Section 87A-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""S397 account" means the account established via memorandum dated July 18, 2005, between the department of accounting and general services and the University of Hawaii, to address the payment of fringe benefits for payroll changes to the tuition and fees special fund."

SECTION 3. Section 87A-39, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) All state agencies having control of funds other than the general fund shall reimburse the State for contributions made by the State pursuant to sections 87A-32, 87A-33, 87A-34, 87A-35, 87A-36, and 87A-37 on account of agency employees whose compensation is paid in whole or part from funds other than the general fund. This subsection shall not apply to the University of Hawaii when an employee's salary is paid in whole or in part by the tuition and fees special fund and the employees position is authorized by the legislature and designated to use tuition and fees special fund moneys by way of the S 397 account, provided that salaries that fall under the S 397 account shall be capped at $ but that cap shall be adjusted by passage of a concurrent resolution."

SECTION 4. Section 88-21, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

SECTION 5. Section 88-125, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each of the departments and agencies hereinafter described, the office of Hawaiian affairs, and the Hawaii health systems corporation shall reimburse the State for the respective amounts payable by the State to cover the liability of the State to the various funds of the system on account of the employees in the departments and agencies, the trustees of the office of Hawaiian affairs, and the employees of the Hawaii health systems corporation. This provision shall apply to any department or agency of the State that is authorized by law to fix, regulate, and collect rents, rates, fees, or charges of any nature. This subsection shall not apply [~~as to rental~~] to:

(1) Rental units receiving federal subsidies until approval has been obtained from the appropriate federal agency[.]; or

(2) University of Hawaii employee salaries paid in whole or in part by the tuition and fees special fund and the employee's position is authorized by the legislature and designated to use tuition and fees special fund moneys by way of the S 397 account, provided that salaries that fall under the S 397 account shall be capped at $ but that cap shall be adjusted by passage of a concurrent resolution."

SECTION 6. Section 304A-2007, Hawaii Revised Statutes, is amended to read as follows:

"§304A-2007 Special and revolving funds; annual report; expenditures in excess of appropriations. (a) The university shall annually provide to the legislature, at least twenty days prior to the convening of the regular session, [an] a report which shall include:

(1) An itemized account of the income to and the expenditure from each university special and revolving fund during the previous fiscal year[.];

[~~(b)~~ ~~The report shall also include all~~]

(2) All expenditures in excess of each fund's appropriation for each fiscal year[.];

(3) Any changes to positions that apply to the exemption, including changes in salary amounts and rationales for the changes;

(4) The total dollar amount of salaries paid from the tuition and fees special fund for the preceding fiscal year for positions that qualify for an exemption from the reimbursement requirements in sections 87A-39 and 88-125; and

(5) The estimated amount of reimbursements for the preceding fiscal year that were exempted from the reimbursement requirements of sections 87A-39 and 88‑125.

[~~(c)~~] (b) The itemized account of income and expenditures required under this section shall be in addition to any other item for reporting that the legislature may specifically require under the law establishing the special or revolving fund."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2576
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII