REPORT TITLE:
Higher Education
DESCRIPTION:
Allows UH to carry over unexpended funds from one fiscal period
to the next and to expend funds beyond the allotment for the
current fiscal year from a subsequent fiscal year to cover the
last university faculty payroll for the current fiscal year.
(HB2062 CD2)
2062
HOUSE OF REPRESENTATIVES H.B. NO. H.D. 2
TWENTIETH LEGISLATURE, 2000 S.D. 1
STATE OF HAWAII C.D. 2
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A BILL FOR AN ACT
RELATING TO HIGHER EDUCATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
1 SECTION 1. The State Constitution established the
2 University of Hawaii as a "body corporate." Recognizing this
3 special status, the legislature has provided the university with
4 more flexibility in managing its resources than a typical state
5 agency.
6 The university is under financial constraints not faced by
7 any other agency of the State. Funds required for the June 30,
8 1998 faculty payroll were restricted in anticipation of the
9 payroll being "lagged" into fiscal year 1999. The faculty union
10 was successful in obtaining a temporary restraining order from
11 federal court preventing this "lag". While the university was
12 required to fund the June 30, 1998 faculty payroll, the
13 restricted funds were never restored.
14 In fiscal years 1998 and 1999, the university was forced to
15 conduct the laborious process of unencumbering over $6,000,000 of
16 one year's encumbrances on the last day of that fiscal year, and
17 on the following day, encumber that same amount using the
18 following fiscal year's funds. The university is in need of
19 relief because of its unique and special situation.
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H.B. NO. H.D. 2
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C.D. 2
1 The purpose of this Act is to:
2 (1) Increase the university's resource management
3 flexibility by enabling the university to carry over
4 unexpended funds from one fiscal period to the next;
5 and
6 (2) Allow the university to expend funds beyond the
7 allotment for the current fiscal year from a subsequent
8 fiscal year to cover the last university faculty
9 payroll for the current fiscal year.
10 SECTION 2. Chapter 37, Hawaii Revised Statutes, is amended
11 by adding a new section to be appropriately designated and to
12 read as follows:
13 "�- University of Hawaii; carryover of funds. (a)
14 The University of Hawaii may retain any appropriation of general
15 funds for operating purposes at the close of a fiscal year. The
16 funds retained shall not lapse until June 30 of the following
17 fiscal year.
18 (b) Any appropriation retained in accordance with this
19 section may be used by the university to supplement the
20 appropriations for any university instructional program and shall
21 not be subject to restriction or be the basis for restriction of
22 other appropriations to the university.
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H.B. NO. H.D. 2
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C.D. 2
1 (c) The university shall submit a report for each fiscal
2 year identifying the amount of funds to be carried over for each
3 appropriation to:
4 (1) The director of finance, no later than thirty days
5 after the close of the fiscal year for which the report
6 is being made; and
7 (2) The legislature, no later than twenty days prior to the
8 convening of the following regular session of the
9 legislature."
10 SECTION 3. Section 37-32, Hawaii Revised Statutes, is
11 amended to read as follows:
12 "�-32 Quarterly allotment periods. Except as provided in
13 [section] sections 37-41.5[,] and 37- , no officer, department,
14 or establishment shall expend or be allowed to expend during any
15 fiscal year any sum for any purpose not specifically authorized
16 by the legislature for expenditure during that particular fiscal
17 year, and not made available pursuant to the allotment system
18 provided for in sections 37-31 to 37-41. For the purposes of the
19 allotment system, each fiscal year shall be divided into four
20 quarterly allotment periods, beginning, respectively, on the
21 first days of July, October, January, and April; provided that in
22 any case where the quarterly allotment period is impracticable,
23 the director of finance may prescribe a different period suited
24 to the circumstances, not exceeding six months nor extending
25 beyond the end of the fiscal year."
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1 SECTION 4. Section 37-41, Hawaii Revised Statutes, is
2 amended to read as follows:
3 "�-41 Appropriations to revert to state treasury;
4 exceptions. Unless otherwise provided by [section] sections
5 37-41.5 and 37- , or any other law, every appropriation or part
6 thereof of any kind made subject to sections 37-31 to 37-40,
7 remaining unexpended and unencumbered at the close of any fiscal
8 year shall lapse and be returned to the general fund in the
9 manner prescribed in section 40-66."
10 SECTION 5. Section 37-42, Hawaii Revised Statutes, is
11 amended to read as follows:
12 "�-42 Allotment as limit of expenditures; liability for
13 excessive expenditure. [No] Except for the University of Hawaii,
14 no department or establishment shall expend or be allowed to
15 expend any sum, or incur or be allowed to incur any obligation in
16 excess of an allotment. The University of Hawaii may expend a
17 sum equal to the end of the fiscal year faculty payroll of the
18 university using funds appropriated for the following fiscal
19 year. No obligation incurred in excess of the balance of an
20 allotment shall be binding against the State, but where the
21 obligation is violative only for having been made in excess of an
22 allotment, the director of finance may authorize payment thereof
23 from unallotted funds. Any officer, employee, or member of any
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H.B. NO. H.D. 2
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1 department or establishment, who makes or causes to be made any
2 excessive expenditure or incurs or causes to be incurred any
3 excessive obligation shall be deemed guilty of neglect of
4 official duty and shall be subject to removal from office and
5 shall be liable to the State for such sum as may have been
6 expended or paid, and such sum, together with interest and costs,
7 shall be recoverable in an action instituted by the attorney
8 general.
9 [Provided that any state department, with the prior consent
10 of the governor and of the director, and subject to terms and
11 conditions insuring protection of the State as shall be imposed
12 by the department, may cosponsor with another state department or
13 with the county or any agency thereof, for the purpose of
14 applying for federal funds or assistance for any project, after
15 certification by the state comptroller that proper and sufficient
16 allotment has been made by the governor to the other department
17 or after receipt of resolution adopted by the county council that
18 proper and sufficient sums for the project have been appropriated
19 and encumbered.]
20 Any state department may cosponsor with another state
21 department, or with the county or any agency thereof, the
22 application for federal funds or assistance for any project:
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H.B. NO. H.D. 2
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C.D. 2
1 (1) After:
2 (A) Certification by the state comptroller that proper
3 and sufficient allotment has been made by the
4 governor to the other department; or
5 (B) Receipt of resolution adopted by the county
6 council that proper and sufficient sums for the
7 project have been appropriated and encumbered;
8 (2) With the prior consent of the governor and of the
9 director of the department; and
10 (3) Subject to terms and conditions ensuring protection of
11 the State as shall be imposed by the department."
12 SECTION 6. Statutory material to be repealed is bracketed.
13 New statutory material is underscored.
14 SECTION 7. This Act shall take effect on July 1, 2000, and
15 shall be repealed on June 30, 2002; provided that:
16 (1) Section 5 of this Act shall take effect on June 30,
17 2000;
18 (2) Sections 37-32 and 37-41, Hawaii Revised Statutes, are
19 reenacted in the form in which they read on June 30,
20 2000; and
21 (3) Section 37-42, Hawaii Revised Statutes, is reenacted in
22 the form in which it read on June 29, 2000.