Hawaii-2018-HB424-Amended

PART I

SECTION 1. The legislature finds that Act 87, Session Laws of Hawaii 2013, was enacted to: (1) remove the president of the University of Hawaii from serving as the chief procurement officer for the university for construction contracts and professional services related to construction contracts; (2) transfer authority over those contracts to the state procurement office; and (3) establish an audit committee within the board of regents to review public funds appropriated by the legislature and expended by the university for construction. Since its enactment, Act 87 has resulted in a bifurcated procurement system at the university wherein a different set of rules and procedures applies depending on whether the procurement involves construction or construction related professional services for university construction projects. Requirements for construction or professional services furnished by licensees under chapter 464, Hawaii Revised Statutes, must comply with the Hawaii public procurement code and procedures governing state executive branch agencies, while requirements for goods and services must comply with the Hawaii public procurement code and university executive and administrative procedures governing university transactions.

In January 2016, the state procurement office issued its report to the legislature as required under Act 87, which documents the extensive oversight, reviews, and coordination between the university and the state procurement office on procurement contracts involving construction and professional services related to construction. The conclusion of the state procurement office in the report was that "based on SPO's review of 102 UH construction solicitations, UH's Administrative Procedures, and 14 post-award Site Visits, SPO finds that UH is conducting construction procurements in a compliant, efficient and transparent manner." In the report, the state procurement office further set forth minimal recommendations for improvement and mentioned several university specific procedures as "best-practices".

The purpose of this part is to reinstate and restore full authority to the university president to act as the universityꞌs chief procurement officer for all procurement contracts under chapter 103D, Hawaii Revised Statutes.

SECTION 2. Section 103D-203, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The chief procurement officer for each of the following state entities shall be:

(1) The judiciary--the administrative director of the courts;

(2) The senate--the president of the senate;

(3) The house of representatives--the speaker of the house of representatives;

(4) The office of Hawaiian affairs--the chairperson of the board;

(5) The University of Hawaii--the president of the University of Hawaii; [provided that, except as specified in section 304A-2672(2), for contracts for construction and professional services furnished by licensees under chapter 464, the administrator of the state procurement office of the department of accounting and general services shall serve as the chief procurement officer;]

(6) The department of education, excluding the Hawaii public library system--the superintendent of education;

(7) The Hawaii health systems corporation--the chief executive officer of the Hawaii health systems corporation; and

(8) The remaining departments of the executive branch of the State and all governmental bodies administratively attached to them--the administrator of the state procurement office of the department of accounting and general services."

SECTION 3. Section 304A-2672, Hawaii Revised Statutes, is amended to read as follows

"§304A-2672 Powers of the board. Notwithstanding any law to the contrary, the board may:

(1) Designate as a university project, any undertaking, improvement, or facility on any one or more of the areas in one or more of the educational institutions under the jurisdiction of the board;

(2) Construct and maintain university projects, including a university project included or to be in a university system; [provided that all procurements for professional services furnished by licensees under chapter 464 for construction projects shall be coordinated with the department of accounting and general services on behalf of the board; provided further that the department of accounting and general services shall not be responsible for procurements determined by both the University of Hawaii and the department of accounting and general services to be professional services furnished by licensees under chapter 464 for repair and maintenance;]

(3) Combine two or more university projects into a university system on one or more of the areas on any one or more of the educational institutions under the jurisdiction of the board, and to maintain the system;

(4) Combine two or more university projects, university systems, or university projects and university systems into a network, on any one or more of the areas on any one or more of the educational institutions under the jurisdiction of the board, and to maintain the network;

(5) Prescribe and collect rents, fees, and charges for the use of or services furnished by any university project and the facilities thereof, and pledge any appropriation to any university project and the facilities thereof that in aggregate, produces revenue of the university at least sufficient to comply with section 304A-2681;

(6) With the approval of the governor, issue revenue bonds under this subpart in such principal amount as may be authorized by the legislature from time to time to finance in whole or in part the cost of construction or the cost of maintenance of any university project, including funding reserves therefor;

(7) Pledge to the punctual payment of revenue bonds and interest thereon, all or any part of the revenue of the university, including any appropriation, in an amount sufficient to pay the revenue bonds and interest as the same become due and to create and maintain reasonable reserves therefor;

(8) Establish a loan program or a commercial paper program upon terms and conditions that the board may determine; and

(9) Advance moneys of the university, not otherwise required, and do any and all other lawful acts as may be necessary, convenient, or desirable, for carrying into execution and administering this subpart."

SECTION 4. This part shall not be applied so as to impair any contract existing as of the effective date of this Act in a manner violative of either the Hawaii State Constitution or Article I, section 10, of the United States Constitution.

PART II

SECTION 5. The legislature finds that the tuition schedule established by the University of Hawaii board of regents has created an unreasonable increase in the cost of attendance. For example, tuition fees for resident full-time undergraduate students at the University of Hawaii Manoa has been steadily increasing since academic year 2011-2012, by approximately 3.1 per cent in 2012-2013, 5.5 per cent in 2013-2014, 7.6 per cent in 2014-2015, 5.1 per cent in 2015-2016, 5.1 per cent in 2016-2017, and tuition fees are scheduled to increase by another 1.9 per cent in 2018-2019.

The legislature recognizes that universities need funds to operate, and that the University of Hawaii is trying to address a substantial deferred repair and maintenance backlog. However, the legislature finds that tuition costs at the university have consistently and significantly been on the rise, even in recent years, such as 2008-2010, during which time the university received greater amounts of general fund appropriations from the legislature.

In addition, the legislature is concerned about the University of Hawaii's significant increase in spending in recent years for personnel expenses, and the lack of demonstrated efforts to restructure and use financial resources efficiently for the benefit of students. The legislature finds that faculty provide a direct connection to university students and students' concerns, and that faculty are not currently represented on the board of regents.

The legislature finds that the cost of tuition and fiscal administration at the University of Hawaii is a matter of statewide concern and that it is in the best interests of the State to ensure that all students have affordable access to higher education and that state funds are used efficiently by the University of Hawaii system for the benefit of students.

Therefore, the purpose of this part is to:

(1) Add to the University of Hawaii board of regents two ex officio nonvoting members who are faculty at the university;

(2) Prohibit the University of Hawaii board of regents from increasing tuition fees until an unspecified date; and

(3) Require the university to provide the legislature with an analysis of whether current tuition increases are helping address the university's repair and maintenance backlog.

SECTION 6. Section 26-11, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The University of Hawaii shall be headed by an executive board to be known as the board of regents.

The board shall consist of [~~fifteen~~]:

(1) Fifteen voting members[~~. At~~], at least one [~~member~~] of which shall be a University of Hawaii student at the time of the initial appointment[~~. This~~]; provided that this member may be reappointed for one additional term even though the member may no longer be a student at the time of reappointment[.]; and

(2) Two ex officio nonvoting members who shall be faculty members of the University of Hawaii; provided that one member shall be a faculty member of a University of Hawaii community college and one member shall be a faculty member at the University of Hawaii at Manoa, University of Hawaii at Hilo, or University of Hawaii West Oahu; provided further that the two faculty members shall not be faculty members at campuses in the same county.

The governor shall reduce the terms of those initially appointed to each seat on the board of regents to provide, as far as practicable, for the expiration of three terms each year; provided that the term of the student member shall not be reduced.

At least twelve of the voting members, except for the student member, shall represent and reside in the specified geographic areas as follows:

(1) Two members from the county of Hawaii;

(2) Two members from the county of Maui;

(3) One member from the county of Kauai; and

(4) Seven members from the city and county of Honolulu.

The board shall have the power, in accordance with the Hawaii constitution and with law, to formulate policy and to exercise control over the university through its executive officer, the president of the university. The board shall have exclusive jurisdiction over the internal organization and management of the university."

SECTION 7. Section 304A-401, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The board of regents may charge resident and nonresident tuition fees for regular courses of instruction at any University of Hawaii campus, including any community college[.]; provided that the board of regents shall not approve any increase in regular credit or summer session tuition fees until ."

SECTION 8. The University of Hawaii shall submit a report to the legislature no later than twenty days before the convening of the regular session of 2018 regarding the status of the university's repair and maintenance costs and whether the tuition increases effective for the 2018-2021 academic years are assisting in addressing the repair and maintenance backlog.

SECTION 9. The candidate advisory council of the board of regents of the University of Hawaii shall present a list of candidates for the two ex officio nonvoting faculty members of the board of regents pursuant to section 6 of this Act to the governor no later than August 1, 2017. The governor shall nominate the two ex officio nonvoting faculty members of the board of regents pursuant to section 6 of this Act no later than September 1, 2017.

PART III

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on January 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	424
TWENTY-NINTH LEGISLATURE, 2017		H.D. 1
STATE OF HAWAII		S.D. 1