REPORT TITLE:
State Government


DESCRIPTION:
Requires the managed process committee to transform State's
accounting procurement and budgeting systems; requires the
procurement policy office to adopt rules for a managed
procurement process that evaluates the efficiency, effectiveness,
and economy of the purchase using uniform accounting standards;
requires the comptroller to collect from state agencies their
portion of benefits received under the state risk management
revolving fund; requires all state departments to develop goals
and objectives; establishes a 6-member advisory commission on
government restructuring to assist in reducing the size and
bureaucracy of state government and increasing government
efficiency and effectiveness; requires the auditor to contract
with an independent auditing firm to conduct an annual financial
audit of state and county governments; prohibits state agencies
from charging other state agencies for services or goods provided
to other state agencies; designates the civil rights commission
as the agency responsible to provide advocacy services to persons
with developmental disabilities and mental illness; prohibits the
director of health from issuing an air pollution control permit
for a medical waste incinerator or a solid waste pollution permit
for a medical waste sterilizer unless a public hearing is held
and an environmental impact statement is submitted with the
permit application. (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        747
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO STATE GOVERNMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I.
 
 2      SECTION 1.  Act 230, Session Laws of Hawaii 1998, is amended
 
 3 as follows:
 
 4      1.  By amending section 5 to read:
 
 5      "SECTION 5.  The committee shall submit annual reports of
 
 6 its plans, recommendations, and implementing actions to the
 
 7 legislature no fewer than fifteen days before the convening of
 
 8 [the] each regular [sessions of 1999, 2000, and 2001.] session."
 
 9      2.  By amending section 6 to read:
 
10      "SECTION 6.  (a)  There is created a committee that shall
 
11 develop, monitor, and review a managed process that enables state
 
12 and county governments to implement public-private competition
 
13 for government services through the managed process that
 
14 determines whether a particular service can be provided more
 
15 efficiently, effectively, and economically by a public agency or
 
16 a private enterprise.  The managed process shall [consider]:
 
17      (1)  Consider all relevant costs, [identify] develop a
 
18           costing model that accurately estimates and accounts
 
19           for the total cost of providing a government function
 

 
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 1           and develop methods by which government in-house costs
 
 2           can be compared to private sector costs;
 
 3      (2)  Consider the costs of conversion to the private sector,
 
 4           including transaction costs, disruption costs, contract
 
 5           monitoring costs, and revenue increases or decreases;
 
 6      (3)  Identify the types of contracts which may be exempt
 
 7           from the managed process[, establish];
 
 8      (4)  Establish protections for the affected state and county
 
 9           employees[, and ensure];
 
10      (5)  Ensure that civil service laws, [merit principles,] and
 
11           collective bargaining laws are not violated[.];
 
12      (6)  Ensure that all costs, including the costs of liability
 
13           insurance, product and performance liability, fringe
 
14           and employee retirement, disability benefits, and other
 
15           allocated direct and indirect overhead costs are
 
16           realistic and fair; and
 
17      (7)  Develop a handbook and training program that educates
 
18           government agencies in the competitive government
 
19           process.
 
20      (b)  The committee members shall be appointed by the
 
21 governor within sixty days from the date of this Act.
 
22      The members of the committee shall include:
 
23      (1)  The director of finance;
 

 
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 1      (2)  The comptroller;
 
 2      (3)  The director of human resources development;
 
 3      (4)  One representative from each of the four major counties
 
 4           to be appointed by the respective mayors;
 
 5      (5)  Two public-sector union representatives;
 
 6      (6)  One private-sector union representative;
 
 7      (7)  Two representatives for private-sector businesses; and
 
 8      (8)  One representative for nonprofit organizations that is
 
 9           a recipient or is entitled to be a recipient under
 
10           chapters 42D and 42F, Hawaii Revised Statutes.
 
11      The committee shall elect a chairperson and vice-chairperson
 
12 from among its members.  A majority of the members shall
 
13 constitute a quorum.  The department of accounting and general
 
14 services shall provide administrative support for the committee.
 
15 Members of the committee shall serve without compensation.  The
 
16 committee shall complete a draft of the managed process by
 
17 December 31, 2000, and complete the managed process by
 
18 December 31, 2001.  The committee shall submit [its report,
 
19 including its] a report of its findings, plans, implementations,
 
20 and recommendations for statutory changes to civil service laws
 
21 and such other laws as may be necessary to implement the managed
 
22 process, to the legislature not less than twenty days prior to
 
23 the convening of [the 1999] each regular session of the
 

 
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 1 legislature."
 
 2      3.  By amending subsections (b) and (c) of section 14 to
 
 3 read:
 
 4      "(b)  All new contracts for goods, services, or construction
 
 5 which are entered into by the State or county after the effective
 
 6 date of this Act [and prior to July 1, 2001, which extend beyond
 
 7 June 30, 2001,] shall include a provision stating that the
 
 8 contract, during its term, is subject to a single review by the
 
 9 State or county pursuant to the managed process in Part III,
 
10 Section 6.  Pursuant to the managed process review, the contract
 
11 may be canceled, renegotiated, continued, or extended by the
 
12 State or county.  All of these contracts shall continue to be
 
13 exempt from civil service laws, merit principles, and collective
 
14 bargaining laws for the duration of the contract even if a
 
15 managed process is not implemented.
 
16      (c)  All contracts for goods, services, or construction
 
17 which are entered into by the State or county on or before the
 
18 effective date of this Act[, including contracts which extend
 
19 beyond June 30, 2001,] shall not be subject to review by the
 
20 State or county pursuant to the managed process in Part III,
 
21 Section 6.  All of these contracts shall continue to be exempt
 
22 from civil service laws and merit principles for the duration of
 
23 the contract."
 

 
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 1      4.  By amending section 17 to read:
 
 2      "SECTION 17.  This Act shall take effect upon approval[;
 
 3 provided that Part III and IV shall be repealed on
 
 4 June 30, 2001]."
 
 5                             PART II.
 
 6      SECTION 2.  The State of Hawaii has experienced a broad
 
 7 range of responses from the procurement of private enterprise to
 
 8 provide or manage previously public agency tasks.  Both
 
 9 proponents and opponents of these contracts provide data that
 
10 support their positions.  Reports have indicated that sending
 
11 prisoners to private facilities has resulted in savings to the
 
12 State.  Other positions advocate the construction of new
 
13 correctional facilities in the State, including the possibility
 
14 of private ownership of that facility.
 
15      One element of a successful enterprise is the ability to
 
16 evaluate proposals and options.  Good decisions are based on fair
 
17 and accurate information.  The State of Hawaii uses the
 
18 procurement code to ensure that state purchases meet certain
 
19 standards, but it has thus far not required any type of
 
20 determination that the procurement of certain services or goods
 
21 is the most effective, efficient, and economical path to take.
 
22 The current economic situation requires the State to have a
 
23 managed process for procurement and to adopt standard methods for
 

 
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 1 evaluation to ensure the effective, efficient, and economical
 
 2 procurement of services.
 
 3      SECTION 3.  Chapter 103D, Hawaii Revised Statutes, is
 
 4 amended by adding a new section to be appropriately designated
 
 5 and to read as follows:
 
 6      "103D-     Managed process for procurement of private
 
 7 enterprise.  The policy office shall adopt rules to implement any
 
 8 public-private competition for government services through the
 
 9 managed process that determines whether a particular service can
 
10 be provided more efficiently, effectively, and economically by a
 
11 public agency or a private enterprise.  The managed process shall
 
12 consider all relevant costs, identify the types of contracts
 
13 which may be exempt from the managed process, establish
 
14 protections for the affected state and county employees, and
 
15 ensure that civil service laws, merit principles, and collective
 
16 bargaining laws are not violated.  The managed process shall
 
17 require any analysis to use uniform accounting standards in
 
18 determining whether a service can be provided more efficiently,
 
19 effectively, and economically by either a public agency or a
 
20 private enterprise.
 
21      For the purposes of this chapter, "uniform accounting
 
22 standards" means a system of accounting for costs and expenses
 
23 which applies accepted accounting practices and customs,
 

 
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 1 including those limited to specific industries, to provide a fair
 
 2 and complete total of the direct and indirect costs and expense
 
 3 of or reasonably allocable to any activity, including:
 
 4      (1)  Direct and indirect labor costs and compensatory
 
 5           benefits;
 
 6      (2)  Direct material costs;
 
 7      (3)  Other allocable indirect costs, including indirect
 
 8           manufacturing or operational costs such as costs of
 
 9           utilities, parts and supplies, insurance and
 
10           depreciation on plant and equipment;
 
11      (4)  Selling, general, and administrative expenses; and
 
12      (5)  The imputed cost that represents the fair and complete
 
13           total of the federal, state, and local tax obligations,
 
14           from which the activity is exempt in whole or in part,
 
15           to the extend of such exemption."
 
16                             PART III.
 
17      SECTION 4.  The legislature finds that our state departments
 
18 and agencies should constantly be working towards improving the
 
19 effectiveness and efficiency of our government.  Improving
 
20 government operations through strategic planning can result in
 
21 increased and more effective government programs and improved
 
22 coordination among different agencies and levels of government,
 
23 and optimal use of state funds and personnel.
 

 
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 1      The legislature believes that the development of goals and
 
 2 objectives is essential for state departments and agencies to
 
 3 determine priorities, guide their decisions, and measure the
 
 4 effectiveness of their programs and services.  Moreover, goals
 
 5 and objectives would assist the legislature in evaluating the
 
 6 budgetary needs of departments and agencies.
 
 7      The legislature further finds that many of our State's
 
 8 departments and agencies have not formally established goals and
 
 9 objectives.  Accordingly, the purpose of this Part is to require
 
10 all departments and agencies to identify their goals, objectives,
 
11 and policies, to provide a basis for determining priorities and
 
12 allocating limited public funds and human resources.
 
13      SECTION 5.  Every department and agency of the State shall
 
14 develop and submit to the legislature twenty days prior to the
 
15 start of the regular session of 2000 and each regular session
 
16 thereafter, an annual report addressing the following:
 
17      (1)  A statement of goals, including what the department or
 
18           agency hopes to accomplish both short and long term;
 
19      (2)  Objectives and policies, specifically setting forth how
 
20           each goal can and will be accomplished;
 
21      (3)  An action plan with a time-table indicating how the
 
22           established objectives and policies will be implemented
 
23           in one, two, and five years; and 
 

 
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 1      (4)  The process that the department or agency will use to
 
 2           measure the performance of its programs and services in
 
 3           meeting the stated goals, objectives, and policies.
 
 4                             PART IV.
 
 5      SECTION 6.  The legislature finds that there is an immediate
 
 6 need to streamline and improve the delivery of government
 
 7 services by restructuring state government.
 
 8      Studies to improve the responsiveness and efficiency of
 
 9 state government have already been conducted, ranging from
 
10 reports in 1974 and 1977 from the commission on organization of
 
11 government ("CORE"), to the 1993 report of the interim commission
 
12 on government redesign, which supported the need to redesign the
 
13 delivery of state government services.
 
14      Recognizing the need to improve the delivery of government
 
15 services and reduce government bureaucracy, the legislature in
 
16 1996 passed Act 297, Session Laws of Hawaii 1996 to address the
 
17 consolidation and streamlining of government departments and
 
18 services.  That Act acknowledged that although the current state
 
19 administration had taken certain actions to respond to the
 
20 State's fiscal crisis and restructure state government agencies
 
21 for more efficient and effective delivery of government services,
 
22 the task of reorganizing state government falls jointly on the
 
23 legislature and the governor:  the legislature to set policies
 

 
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 1 and the governor to develop and implement an action plan to
 
 2 implement the policies.
 
 3      In response to Act 297, the governor issued an interim
 
 4 report to the legislature entitled "Restructuring State
 
 5 Government Services" (December, 1996), which made a number of
 
 6 findings and recommendations to streamline government.  However,
 
 7 the legislature finds that these efforts, while important, do not
 
 8 go far enough, and that the circumstances that prompted the
 
 9 enactment of Act 297 still remain.
 
10      There continues to be a need to resolve the State's economic
 
11 stagnation, as well as a need for government agencies to adapt to
 
12 the ever-changing needs and demands of the public they serve.
 
13 State agencies must revise and retool their concepts of public
 
14 service in order to remain responsive and efficient.  There
 
15 continues to be not only duplication of effort among state
 
16 agencies but also encroachment into the functions of the private
 
17 sector.  Many state government services, although well-meaning,
 
18 have placed increased strain on the State's weak fiscal
 
19 situation.  In order to carry out the most essential public
 
20 services, the State must make the best use of every resource,
 
21 every tax dollar, and every personnel position.
 
22      The legislature further finds that the State's continuing
 
23 poor economy, weak revenue projections, and budget gaps between
 

 
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 1 expected expenses and income requires a determination as to the
 
 2 best means to increase government productivity and realize
 
 3 additional cost savings.  The legislature finds that while the
 
 4 State's economic situation is weak, it nonetheless presents an
 
 5 opportunity to enhance the productivity of state government and
 
 6 to fill the budget gap with the resultant savings.
 
 7      Accordingly, the purpose of this Part is to accelerate the
 
 8 restructuring of state government by:
 
 9      (1)  Creating an advisory commission on government
 
10           restructuring;
 
11      (2)  Stating appropriate policies for restructuring; and
 
12      (3)  Providing for a comprehensive implementation strategy
 
13           to be utilized in the review of the departments and
 
14           offices of the executive branch of state government.
 
15      The legislature finds that these measures will help to
 
16 enhance productivity and promote economic growth in Hawaii
 
17 through the redirection of government first to a commitment to
 
18 education of our children and more efficient delivery of services
 
19 to stimulate economic growth of small businesses and reshaping
 
20 economic development programs.
 
21      SECTION 7.  Advisory commission on government restructuring;
 
22 establishment; membership; appointment; compensation; duties.
 
23 (a)  There is established an advisory commission on government
 

 
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 1 restructuring in the office of the governor for administrative
 
 2 purposes.  The advisory commission shall consist of the following
 
 3 six members to be appointed by the governor as provided in
 
 4 section 26-34, Hawaii Revised Statutes:
 
 5      (1)  Two members to be appointed by the governor;
 
 6      (2)  Two members to be appointed from a list of nominees
 
 7           submitted by the president of the senate;
 
 8      (3)  Two members to be appointed from a list of nominees
 
 9           submitted by the speaker of the house of
 
10           representatives; and
 
11      (4)  If the governor fails to make these appointments within
 
12           thirty days, the president of the senate and the
 
13           speaker of the house of representatives shall make the
 
14           appointments.
 
15      (b)  In carrying out its duties under this section, the
 
16 advisory commission may request staff assistance from the
 
17 department of budget and finance, department of business,
 
18 economic development, and tourism, and other appropriate state
 
19 agencies.
 
20      (c)  The members of the advisory commission shall select the
 
21 chairperson and serve without compensation, but shall be
 
22 reimbursed for expenses, including travel expenses, necessary for
 
23 the performance of their duties.
 

 
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 1      (d)  The advisory commission shall study the role of each of
 
 2 the departments and agencies in the executive branch of state
 
 3 government, and develop an action plan to restructure state
 
 4 government and reduce government bureaucracy, consolidate
 
 5 agencies, and streamline procedures as necessary for the
 
 6 efficient functioning of state government based on the following
 
 7 policies and goals:
 
 8      (1)  The creation of a clear sense of mission for
 
 9           restructuring state government;
 
10      (2)  The avoidance of making changes to reorganize state
 
11           government for the sake of change only;
 
12      (3)  The development of government which provides "user-
 
13           friendly" services in and out of state government;
 
14      (4)  The adoption of "best practices" of management and
 
15           operations;
 
16      (5)  The search for economies of scale;
 
17      (6)  The elimination of duplicative or outmoded functions
 
18           and activities;
 
19      (7)  The enhancement of productivity by consolidating
 
20           functions;
 
21      (8)  The elimination of unnecessary regulation;
 
22      (9)  The redesigning of processes to increase efficiency,
 
23           cut costs, and reduce public inconvenience;
 

 
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 1     (10)  The exposure of government operations to competition;
 
 2     (11)  The guarantee of effective, efficient government
 
 3           operations; and
 
 4     (12)  The realization of significant long-term savings.
 
 5      (e)  In developing an action plan under subsection (d), the
 
 6 advisory commission shall make recommendations to achieve the
 
 7 following:
 
 8      (1)  Consolidate or restructure redundant state government
 
 9           services, programs, and operations; 
 
10      (2)  Improve the departmental effectiveness with which
 
11           general fund dollars are spent;
 
12      (3)  Reduce the ratio of management, administrative,
 
13           clerical, and supervisory personnel to the front-line
 
14           personnel;
 
15      (4)  Integrate the effective use of technology;
 
16      (5)  Achieve the most effective delivery of services to
 
17           Hawaii citizens; and
 
18      (6)  Any other areas that the advisory commission deems
 
19           relevant to enhance productivity in Hawaii state
 
20           government.  The advisory commission shall develop
 
21           criteria or benchmarks as necessary to assist in the
 
22           development of productivity plans for state
 
23           departments.
 

 
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 1      SECTION 8.  Report.  The advisory commission shall report
 
 2 its  preliminary findings and recommendations, including any
 
 3 proposed implementing legislation, to the legislature no later
 
 4 than twenty days before the convening of the regular session of
 
 5 2000, and shall submit its final report no later than twenty days
 
 6 before the convening of the regular session of 2001.
 
 7      SECTION 9.  There is appropriated out of the general
 
 8 revenues of the State of Hawaii the sum of $20,000, or so much
 
 9 thereof as may be necessary for fiscal year 1999-2000, for the
 
10 purposes of this Part.  The sums appropriated shall be expended
 
11 by the office of the governor.
 
12      SECTION 10.  The advisory commission on government
 
13 restructuring shall cease to operate after the adjournment sine
 
14 die of the 2001 regular session of the legislature.
 
15                              PART V.
 
16      SECTION 11.  Section 41D-4, Hawaii Revised Statutes, is
 
17 amended by amending subsections (b) and (c) to read as follows:
 
18      "(b)  In addition to any appropriation the legislature shall
 
19 make to the state risk management revolving fund, the comptroller
 
20 [may] shall apportion to, and collect from, state agencies those
 
21 amounts of money that, in the discretion of the comptroller,
 
22 reflect benefits received by the agencies under this chapter.
 
23 The comptroller [may] shall consider the relevant risk and loss
 

 
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 1 experience of the agencies in making apportionments and
 
 2 assessments.  Funds so collected shall be deposited into the
 
 3 state risk management revolving fund.
 
 4      (c)  [The comptroller may establish deductibles for the
 
 5 state agencies for certain perils or classes of property losses
 
 6 and may:
 
 7      (1)  Assess the agencies for losses incurred in the amount
 
 8           of the deductible; or
 
 9      (2)  Reduce the payment from the state risk management
 
10           revolving fund to cover the casualty loss by the amount
 
11           of the deductible.] The comptroller shall prepare a
 
12           report, for each fiscal year, for each agency that is
 
13           subject to subsection (b), stating the amount
 
14           apportioned to, and to be collected from, that agency.
 
15           The report shall be submitted to the agency and to the
 
16           legislature no later than one hundred forty-five days
 
17           before the commencement of each regular session of the
 
18           legislature preceeding the fiscal year applicable to
 
19           the apportionment."
 
20                             PART VI.
 
21      SECTION 12.  The legislature finds that there is an
 
22 immediate need for comprehensive annual financial audits of
 
23 Hawaii state and county governments.
 

 
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 1      The goal of an annual audit is to ascertain the financial
 
 2 viability of state and county governments and to provide the
 
 3 management reports which will lay the groundwork to reshape
 
 4 government for a new and improved way of doing business.  The
 
 5 purpose of the audit is to verify the financial standing of state
 
 6 and county governments, examine their organization, management,
 
 7 operations, and programs, and identify opportunities for
 
 8 reorganization, consolidation, and elimination of duplicated
 
 9 functions.  In addition, the legislature finds that each audit
 
10 should be conducted by one or more independent auditors to
 
11 provide an outsider's view and determine where reductions can be
 
12 made in state and county spending.
 
13      The legislature further finds that an annual financial audit
 
14 of state and county governments will call attention to
 
15 irregularities in the procurement process, such as has occurred
 
16 at the city and county of Honolulu's Ewa Villages housing
 
17 project, and will also improve government operations and
 
18 efficiency by identifying existing problems or potential future
 
19 problems involving internal controls.  If the auditor finds that
 
20 an annual financial audit of state and county governments is not
 
21 feasible because of time, cost, or other limitations, the auditor
 
22 is to determine in its discretion which agencies are to be
 
23 audited by the independent auditor each year, as long as each
 

 
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 1 state and county agency is audited at least once every two years.
 
 2      The purpose of this Part is, therefore, to provide for the
 
 3 auditor to contract with one or more independent auditing firms
 
 4 to conduct an annual financial audit of Hawaii state and county
 
 5 governments.  The audit is to provide for a complete review of
 
 6 all state and county agencies and programs, services, and
 
 7 activities operated by those agencies for the purpose of
 
 8 evaluating efficiency in operations and effectiveness in state
 
 9 and county spending. 
 
10      SECTION 13.  Definitions.  For purposes of this Part:
 
11      "Agency" means any state or county board, commission,
 
12 department, committee, institution, agency, or office within the
 
13 legislative, executive, or judicial branch of state or county
 
14 government, including institutions of higher education.
 
15      "Independent auditor" means an independent accounting or
 
16 auditing firm of national standing that has experience in
 
17 conducting financial audits of state and county governments
 
18 agencies.
 
19      SECTION 14.  Annual financial audit of state and county
 
20 governments.  The auditor, through competitive sealed bidding or
 
21 proposals pursuant to chapter 103D, Hawaii Revised Statutes,
 
22 shall contract with one or more independent auditors to annually
 
23 conduct a comprehensive financial audit of state and county
 

 
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 1 government operations to:
 
 2      (1)  Challenge and question the basic assumptions underlying
 
 3           all agencies and the programs and services they provide
 
 4           to identify those that are vital to the best interests
 
 5           of the people of the State of Hawaii and those that no
 
 6           longer meet that goal;
 
 7      (2)  Review the functions, organizational structures, and
 
 8           staffing levels of all agencies and the programs,
 
 9           services, and activities operated by those agencies;
 
10      (3)  Evaluate the efficiency with which agencies operate the
 
11           programs under their jurisdictions and fulfill the
 
12           duties assigned to them by law;
 
13      (4)  Determine methods to maximize the amount of federal
 
14           funds received by the State and the counties for their
 
15           programs in order to better ensure that the people of
 
16           Hawaii receive a greater share of the taxes levied on
 
17           them by the federal government;
 
18      (5)  Determine methods to establish a system for the
 
19           reporting of measurements related to performance and
 
20           for integrating the information so reported into the
 
21           State's and counties' fiscal planning processes;
 
22      (6)  Make recommendations, including but not limited to the
 
23           following:
 

 
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 1           (A)  Any necessary changes in organizational structure,
 
 2                management style, and administrative procedures to
 
 3                improve the overall administration and operation
 
 4                of state and county governments;
 
 5           (B)  The use of automated technology;
 
 6           (C)  The privatization of certain operations, or other
 
 7                alternative service delivery approaches including
 
 8                managed (public-private) competition; and
 
 9           (D)  The elimination of or reduction in funding to
 
10                various agencies, programs, or services; and
 
11      (7)  Make recommendations to the legislature as to
 
12           amendments to statutory and constitutional provisions
 
13           that will improve the efficiency and economy of state
 
14           and county governments.
 
15      SECTION 15.  Assistance from state and county agencies.  All
 
16 departments, agencies, and offices of the State and counties and
 
17 any private companies or agencies receiving state or county funds
 
18 shall fully cooperate with and provide assistance to the
 
19 independent auditor as needed with respect to its audit, and
 
20 shall respond promptly to the auditor's requests in conducting
 
21 this audit, including but not limited to requests for records and
 
22 other information requested in the course of the audit.
 
23      SECTION 16.  Financial audit work plan; public input;
 

 


 

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 1 reports.(a)  In performing its duties under this Part, the
 
 2 independent auditor shall adopt a financial audit work plan,
 
 3 which shall ensure that the audit is conducted by program and
 
 4 functional areas so that individual agency performance can be
 
 5 analyzed in relationship to other agencies and overlaps and gaps
 
 6 can be detected.
 
 7      (b)  The work plan shall include the conduct of public
 
 8 hearings throughout the State and the establishment of a
 
 9 telephone hotline for citizens to call in suggestions for
 
10 improving government operations or to report instances of fraud,
 
11 waste, or other abuse.  To the greatest extent possible, the
 
12 independent auditor shall seek input from state and county
 
13 employees at all levels.
 
14      (c)  If the auditor determines that an annual financial
 
15 audit of state and county governments is not feasible due to
 
16 time, cost, or other limitations, the auditor shall determine
 
17 which agencies shall be audited by the independent auditor each
 
18 year; provided that each state and county agency shall be audited
 
19 at least once every two years.
 
20      (d)  The independent auditor, consistent with generally
 
21 accepted accounting principles and auditing standards, shall
 
22 report its findings and recommendations to the legislature and
 
23 the governor no later than twenty days before the convening of
 

 
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 1 the regular session of 2000.
 
 2      SECTION 17.  There is appropriated out of the general
 
 3 revenues of the State of Hawaii the sum of $          , or so
 
 4 much thereof as may be necessary for fiscal year 1999-2000, for
 
 5 the purposes of this Part, including costs incurred under this
 
 6 Act in contracting with one or more independent auditors to
 
 7 conduct financial audits of state and county government agencies
 
 8 in accordance with this Part and for costs incurred in the
 
 9 conduct of those audits.  The sum appropriated shall be expended
 
10 by the auditor for the purposes of this Part.
 
11      SECTION 18.  There is appropriated out of the general
 
12 revenues of the State of Hawaii the following sums, or so much
 
13 thereof as may be necessary for fiscal year 1999-2000, to assist
 
14 the counties in implementing this Part:
 
15      City and county of Honolulu                 $
 
16      County of Kauai                             $
 
17      County of Maui                              $
 
18      County of Hawaii                            $             
 
19           Total                                  $
 
20      The sums appropriated shall constitute the State's share of
 
21 the cost of mandated programs under Article VIII, section 5, of
 
22 the State Constitution.
 
23                             PART VII.
 

 
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 1      SECTION 19.  Government's operating role is to provide
 
 2 services to the community.  When requests are made of government
 
 3 to perform services that are within the jurisdiction of the
 
 4 agency and the agency has the capacity to honor the requests, the
 
 5 services should be performed without hesitation.  In the interest
 
 6 of productivity and efficiency in government, requests made of
 
 7 one agency by another shall not require reimbursement except for
 
 8 specific equipment or supplies that are required to complete the
 
 9 task.
 
10      The purpose of this Part is to promote efficiency in
 
11 government by prohibiting interagency charges.
 
12      SECTION 20.  Chapter 37, Hawaii Revised Statutes, is amended
 
13 by adding a new section to be appropriately designated and to
 
14 read as follows:
 
15      "37-     Interagency charges prohibited.  All executive
 
16 departments and administrative agencies shall operate efficiently
 
17 and productively through cooperation of services and resources.
 
18 Any executive department or administrative agency shall furnish
 
19 services or goods as needed to other executive departments or
 
20 administrative agencies.  No person or agency may request or
 
21 receive payment for any goods or services, funded by general
 
22 funds, furnished by one executive department or administrative
 
23 agency to another except for specific equipment or supplies
 

 
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 1 required for the task."
 
 2                            PART VIII.
 
 3      SECTION 21.  The legislature finds that currently, the state
 
 4 designated department that provides advocacy services to persons
 
 5 with developmental disabilities and mental illness is the
 
 6 department of accounting and general services.
 
 7      The legislature finds that the civil rights commission is a
 
 8 more appropriate administrator to carry out the advocacy
 
 9 services.  Therefore, the purpose of this Part is to designate
 
10 the civil rights commission as the agency responsible to provide
 
11 advocacy services to persons with developmental disabilities and
 
12 mental illness.
 
13      SECTION 22.  Section 333F-8.5, Hawaii Revised Statutes, is
 
14 amended by amending subsections (b), (c), and (d), to read as
 
15 follows:
 
16      "(b)  [The governor may designate an entity or] The civil
 
17 rights commission shall be the agency to carry out the purposes
 
18 of this section.
 
19      (c)  [The entity or agency designated by the governor] The
 
20 civil rights commission shall have access to all records of any
 
21 person with developmental disabilities or mental illness, to the
 
22 extent required by federal law.
 
23      (d)  [The entity or agency so designated by the governor]
 

 
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 1 The civil rights commission shall provide those advocacy services
 
 2 to persons with developmental disabilities or mental illness as
 
 3 required by federal law.  All departments and agencies of the
 
 4 State and the judiciary shall cooperate with [the entity or
 
 5 agency so designated] the civil rights commission to carry out
 
 6 the purposes of this section."
 
 7      SECTION 23.  All officers and employees whose functions are
 
 8 transferred from the department of accounting and general
 
 9 services to the civil rights commission by this Part shall be
 
10 transferred with their functions and shall continue to perform
 
11 their regular duties upon their transfer, subject to the state
 
12 personnel laws and this Part.
 
13      No officer or employee of the State having tenure shall
 
14 suffer any loss of salary, seniority, prior service credit,
 
15 vacation, sick leave, or other employee benefit or privilege as a
 
16 consequence of this Part, and such officer or employee may be
 
17 transferred or appointed to a civil service position without the
 
18 necessity of examination; provided that the officer or employee
 
19 possesses the minimum qualifications for the position to which
 
20 transferred or appointed; and provided that subsequent changes in
 
21 status may be made pursuant to applicable civil service and
 
22 compensation laws.
 
23      An officer or employee of the State who does not have tenure
 

 
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 1 and who may be transferred or appointed to a civil service
 
 2 position as a consequence of this Part shall become a civil
 
 3 service employee without the loss of salary, seniority, prior
 
 4 service credit, vacation, sick leave, or other employee benefits
 
 5 or privileges and without the necessity of examination; provided
 
 6 that such officer or employee possesses the minimum
 
 7 qualifications for the position to which transferred or
 
 8 appointed.
 
 9      In the event that an office or position held by an officer
 
10 or employee having tenure is abolished, the officer or employee
 
11 shall not thereby be separated from public employment, but shall
 
12 remain in the employment of the State with the same pay and
 
13 classification and shall be transferred to some other office or
 
14 position for which the officer or employee is eligible under the
 
15 personnel laws of the State as determined by the head of the
 
16 department or the governor.
 
17      All appropriations, records, equipment, machines, files,
 
18 supplies, contracts, books, papers, documents, maps, and other
 
19 personal property heretofore made, used, acquired, or held by the
 
20 department of accounting and general services relating to the
 
21 functions transferred to the civil rights commission shall be
 
22 transferred with the functions to which they relate.
 
23                             PART IX.
 

 
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 1      SECTION 24.  Presently, the department of health is
 
 2 incapable of determining whether the gases being emitted by
 
 3 medical wastes being disposed of by incineration or autoclaving
 
 4 are safe to breathe.  There are recorded incidents of men, women,
 
 5 and children becoming ill after breathing the gases emitted by a
 
 6 medical waste facility.  Based on anecdotal evidence, there is
 
 7 reason to suspect that these emissions may also cause cancer.  In
 
 8 addition, there is a high incidence of cancer--causation
 
 9 unknown--in neighborhoods where these facilities exist.  This
 
10 type of waste facility also employs the use of heavy trucks and
 
11 equipment, which is not acceptable in residential environments.
 
12 In the interest of the health and safety of Hawaii's citizens,
 
13 public hearings and environmental impact statements should be
 
14 required before permits or renewal of permits are issued to
 
15 medical waste facilities.  These two requirements will allow the
 
16 director of health to efficiently administer the permits for
 
17 medical waste facilities.
 
18      SECTION 25.  Section 342B-25, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "[[]342B-25[]]  Approval of permit.(a)  The director
 
21 shall issue a permit for any term not exceeding five years if it
 
22 is determined that the source will comply with all requirements
 
23 of this chapter and the rules and standards adopted pursuant to
 

 
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 1 this chapter.
 
 2      (b)  The permit may be subject to such reasonable conditions
 
 3 as the director may prescribe, including emission limitations or
 
 4 other conditions to assure compliance with all hazardous air
 
 5 pollutant maximum achievable control technology standards or
 
 6 rules adopted pursuant to this chapter.
 
 7      (c)  The director, on application, shall renew a permit for
 
 8 a term not exceeding five years[,] if it is determined that the
 
 9 source complies with all requirements of this chapter and the
 
10 rules and standards adopted pursuant to this chapter.
 
11      (d)  The director shall not deny an application for the
 
12 issuance or renewal of a permit without affording the applicant
 
13 an opportunity for a hearing in accordance with chapter 91.
 
14      (e)  The director shall not issue a permit for a covered
 
15 source if the administrator timely objects to its issuance.
 
16      (f)  A public hearing and preparation of an environmental
 
17 impact statement, pursuant to section 343, shall be required
 
18 prior to a permit or renewal of a permit being issued for a
 
19 medical waste facility."
 
20      SECTION 26.  Section 342H-4, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "342H-4  Permits; procedures for.(a)  An application for
 
23 any permit required under this chapter shall be in a form
 

 
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 1 prescribed by the director.
 
 2      (b)  The department may require that applications for
 
 3 permits be accompanied by plans, specifications, and any other
 
 4 information it deems necessary in order for it to determine
 
 5 whether the proposed installation, alteration, disposal, or use
 
 6 will be in accord with applicable rules and standards.
 
 7      (c)  The director shall issue a permit for any term, not
 
 8 exceeding five years, if the director determines that [such] this
 
 9 will be in the public interest; provided that the permit may be
 
10 subject to such reasonable conditions as the director may
 
11 prescribe.  The director, on application, shall renew a permit
 
12 from time to time for a term not exceeding five years if the
 
13 director determines that [such] this is in the public interest.
 
14 The director shall not deny an application for the issuance or
 
15 renewal of a permit without affording the applicant an
 
16 opportunity for a hearing in accordance with chapter 91.
 
17      The director, on the director's own motion or the
 
18 application of any person, may modify, suspend, or revoke any
 
19 permit if, after affording the permittee an opportunity for a
 
20 hearing in accordance with chapter 91, the director determines
 
21 that:
 
22      (1)  There is a violation of any condition of the permit;
 
23      (2)  The permit was obtained by misrepresentation, or
 

 
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 1           failure to disclose fully all relevant facts;
 
 2      (3)  There is a change in any condition that requires either
 
 3           a temporary or permanent reduction or elimination of
 
 4           the permitted disposal; or
 
 5      (4)  [Such] This is in the public interest.
 
 6      In determining the public interest, the director shall
 
 7 consider the environmental impact of the proposed action, any
 
 8 adverse environmental effects [which] that cannot be avoided
 
 9 should the action be implemented, the alternatives to the
 
10 proposed action, the relationship between local short-term uses
 
11 of the environment and the maintenance and enhancement of long-
 
12 term productivity, and any irreversible and irretrievable
 
13 commitments of resources [which] that would be involved in the
 
14 proposed action should it be implemented, and any other factors
 
15 [which] that the director [may], by rule, may prescribe; provided
 
16 that any determination of public interest shall promote the
 
17 optimum balance between economic development and environmental
 
18 quality.
 
19      (d)  The failure of the director to act on an application
 
20 for the issuance of a permit or an application by a permit holder
 
21 for the modification or renewal thereof within one hundred eighty
 
22 days of the receipt of [such] the application, except for all
 
23 federally delegated permit programs and federally approved
 

 
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 1 programs, shall be deemed a grant of [such] the application
 
 2 [provided that] if the applicant acts consistently with the
 
 3 application and all plans, specifications, and other information
 
 4 submitted as a part thereof.
 
 5      (e)  No applicant for a modification or renewal of a permit
 
 6 shall be held in violation of this chapter during the pendency of
 
 7 the applicant's application [provided that] if the applicant acts
 
 8 consistently with the permit previously granted, the application
 
 9 and all plans, specifications, and other information submitted as
 
10 a part thereof.
 
11      (f)  A public hearing and preparation of an environmental
 
12 impact statement, pursuant to section 343, shall be required
 
13 prior to a permit or renewal of a permit being issued for a
 
14 medical waste sterilizer."
 
15      SECTION 27.  All existing holders of permits under sections
 
16 342B-24 and 342H-4, Hawaii Revised Statutes, for medical waste
 
17 facilities on the effective date of this section shall file an
 
18 environmental impact statement concerning the facility and have a
 
19 public hearing concerning the facility before July 1, 2000.
 
20      SECTION 28.  This Part does not affect rights and duties
 
21 that matured, penalties that were incurred, and proceedings that
 
22 were begun, before its effective date.
 
23      SECTION 29.  Statutory material to be repealed is bracketed.
 

 
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 1 New statutory material is underscored.
 
 2      SECTION 30.  This Act shall take effect upon its approval,
 
 3 except section 9, and Parts V and VI shall take effect on July 1,
 
 4 1999.