REPORT TITLE:
Civil Service Reform


DESCRIPTION:
Enacts various civil service reforms affecting classification and
compensation, the civil service commission, the public employees
compensation appeals board, employee benefits, exempt positions,
conflicts with collective bargaining agreements, recruitment,
workforce reductions, job performance, and career planning.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2870
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC EMPLOYEES.



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

 1                              Part I
 
 2      SECTION 1.  The purpose of this part is to require the
 
 3 director of human resources development, through the use of
 
 4 broadband classes, to:
 
 5      (1)  Reduce the number of classes of work existing in the
 
 6           civil service on January 1, 2000; and
 
 7      (2)  Describe competency levels and specialty areas, if any,
 
 8           in class specifications for the purpose of paying an
 
 9           employee based on the employee's demonstrated
 
10           competence.
 
11      SECTION 2.  (a)  The director of human resources
 
12 development, through the use of broadband classes, shall reduce
 
13 the number of classes of work existing in the civil service on
 
14 January 1, 2000, by not less than          per cent before
 
15 July 1, 2002.
 
16      (b)  The director of human resources development, through
 
17 the use of broadband classes, shall reduce the number of classes
 
18 of work existing in the civil service on January 1, 2000, by not
 
19 less than          per cent before July 1, 2004.
 

 
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 1      (c)  The director of human resources development, through
 
 2 the use of broadband classes, shall reduce the number of classes
 
 3 of work existing in the civil service on January 1, 2000, by not
 
 4 less than          per cent before July 1, 2006.
 
 5      (d)  The director of human resources development, through
 
 6 the use of broadband classes, shall reduce the number of classes
 
 7 of work existing in the civil service on January 1, 2000, by not
 
 8 less than          per cent before July 1, 2008.
 
 9      (e)  The director of human resources development, through
 
10 the use of broadband classes, shall reduce the number of classes
 
11 of work existing in the civil service on January 1, 2000, by not
 
12 less than          per cent before July 1, 2010.
 
13      SECTION 3.  The civil service to which this part applies
 
14 shall comprise all positions in the State and include all
 
15 personal services performed for the State, except those positions
 
16 and personal services exempted from the civil service by section
 
17 76-16, Hawaii Revised Statutes, or another specific law.
 
18      SECTION 4.  (a)  Notwithstanding chapter 89, Hawaii Revised
 
19 Statutes, or any collective bargaining agreement to the contrary,
 
20 the director of human resources development shall not be required
 
21 to consult with, or obtain the concurrence of, the exclusive
 
22 representative of a public employee organization in order to
 
23 carry out the purposes of this Act.
 

 
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 1      (b)  In addition to the minimum qualifications for each
 
 2 broadband class, the director of human resources development may
 
 3 establish other job-related qualifications that may be required
 
 4 for particular positions within a class.
 
 5      (c)  When the director of human resources development
 
 6 establishes a broadband class, the director shall describe the
 
 7 competency levels and specialty areas, if any, in the class
 
 8 specification.  The director shall specify any instances in which
 
 9 these competency levels and specialty areas are to be treated as
 
10 separate classes for the purpose of applying other laws or rules,
 
11 or for the purpose of paying an employee based on the employee's
 
12 demonstrated competence.
 
13      (d)  In the event of a conflict between this part and
 
14 chapter 89, Hawaii Revised Statutes, or any collective bargaining
 
15 agreement, this Act shall control.
 
16      SECTION 5.  As used in this part:
 
17      "Broadband classes" mean classes for which the same general
 
18 title may be used to designate each position allocated to the
 
19 class and which may include more than one level or more than one
 
20 specialty area within the same general field or work.
 
21      "Class or class of work" means all positions which are
 
22 sufficiently similar with respect to their duties,
 
23 responsibilities, and authority and level of difficulty that the
 

 
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 1 same descriptive title may be used to describe each position
 
 2 allocated to the class, that the same basic requirements as to
 
 3 education, experience, knowledge, skill, ability, and other
 
 4 qualifications are applicable, and that the same pay range may be
 
 5 assigned.
 
 6      "Class specification" means the official document providing
 
 7 a formalized summary depicting the duties, responsibilities,
 
 8 level of difficulty and authority, and minimum qualification
 
 9 requirements of a class.
 
10                              Part II
 
11      SECTION 6.  The purpose of this part is to limit the basis
 
12 for judgments made by the civil service commission, the public
 
13 employees' compensation appeals board, the judiciary personnel
 
14 appeals board, and the Hawaii health systems corporation
 
15 personnel appeals board to findings, conclusions, decisions, or
 
16 orders that are:
 
17      (1)  In violation of constitutional or statutory provisions;
 
18      (2)  In excess of the statutory authority or jurisdiction of
 
19           the director of human resources development, the
 
20           administrative director of the courts, or the Hawaii
 
21           health systems corporation chief executive officer;
 
22      (3)  Made upon unlawful procedure;
 
23      (4)  Affected by other error of law;
 

 
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 1      (5)  Clearly erroneous in view of the reliable, probative,
 
 2           and substantial evidence on the whole record; or
 
 3      (6)  Arbitrary, or capricious, or characterized by abuse of
 
 4           discretion or clearly unwarranted exercise of
 
 5           discretion.
 
 6      SECTION 7.  Section 76-9, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "�76-9 Employees of the judiciary.  (a)  It is the intent
 
 9 of the legislature that the personnel of the judiciary shall form
 
10 a separately administered part of the system of personnel
 
11 administration established by this chapter and chapter 77, unless
 
12 specifically exempted by this chapter or any other law; provided
 
13 that:
 
14      (1)  The judiciary shall have a status coequal with the
 
15           executive branch of the State and with the several
 
16           counties for purposes of the development of a position
 
17           classification plan, the formulation of personnel rules
 
18           [and regulations], and the administration of the
 
19           judiciary personnel system, including[, but not limited
 
20           to] the classification, reclassification, allocation,
 
21           and reallocation of a particular position, the
 
22           publication of a vacancy announcement, the examination
 
23           of applicants, and the preparation of eligible lists;
 

 
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 1      (2)  In the development of a position classification plan,
 
 2           the formulation of personnel rules [and regulations],
 
 3           and the administration of the judiciary personnel
 
 4           system, the chief justice or the chief justice's
 
 5           designee shall consult with the director of human
 
 6           resources development;
 
 7      (3)  Any action of the chief justice or the chief justice's
 
 8           designee including the classification,
 
 9           reclassification, allocation, and reallocation of a
 
10           particular position, the publication of a vacancy
 
11           announcement, the examination of applicants, the
 
12           preparation of an eligible list, and appeals from
 
13           suspensions, dismissals and demotions may be appealed
 
14           by any person, employee or the exclusive bargaining
 
15           unit representative to the judiciary personnel appeals
 
16           board.  The board shall be composed of three members,
 
17           one representative from the department of human
 
18           resources development, one representative of the
 
19           judiciary and one exclusive bargaining unit
 
20           representative.  The provisions contained in section
 
21           26-34 shall not apply to the members of the judiciary
 
22           personnel appeals board.  The board shall sit as an
 
23           appellate body on matters within the jurisdiction of
 

 
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 1           the judiciary with equal authority as the civil service
 
 2           commission established by section 26-5; and
 
 3      (4)  Nothing in chapters 76 and 77 shall be construed to
 
 4           require the approval of the governor or any executive
 
 5           agency for the judiciary to establish such positions in
 
 6           the judicial branch as may be authorized and funded by
 
 7           the legislature.
 
 8      (b)  Upon review of the record, the judiciary personnel
 
 9 appeals board may affirm the decision of the administrative
 
10 director of the courts or remand the case with instructions for
 
11 further proceedings; or it may reverse or modify the decision and
 
12 order if the substantial rights of the petitioners may have been
 
13 prejudiced because the administrative director's findings,
 
14 conclusions, decisions, or orders are:
 
15      (1)  In violation of constitutional or statutory provisions;
 
16      (2)  In excess of the statutory authority or jurisdiction of
 
17           the administrative director;
 
18      (3)  Made upon unlawful procedure;
 
19      (4)  Affected by other error of law;
 
20      (5)  Clearly erroneous in view of the reliable, probative,
 
21           and substantial evidence on the whole record; or
 
22      (6)  Arbitrary, or capricious, or characterized by abuse of
 
23           discretion or clearly unwarranted exercise of
 

 
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 1           discretion."
 
 2      SECTION 8.  Section 76-14, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "�76-14  General duties of commission.  (a)  The civil
 
 5 service commission shall hear and decide appeals from any action
 
 6 of the director of human resources development under this
 
 7 chapter, as well as from dismissals, demotions, and suspensions
 
 8 as [hereinafter] provided[.] in this chapter.
 
 9      (b)  Upon review of the record, the civil service commission
 
10 may affirm the decision of the director of human resources
 
11 development or remand the case with instructions for further
 
12 proceedings; or it may reverse or modify the decision and order
 
13 if the substantial rights of the petitioners may have been
 
14 prejudiced because the director's findings, conclusions,
 
15 decisions, or orders are:
 
16      (1)  In violation of constitutional or statutory provisions;
 
17      (2)  In excess of the statutory authority or jurisdiction of
 
18           the director;
 
19      (3)  Made upon unlawful procedure;
 
20      (4)  Affected by other error of law;
 
21      (5)  Clearly erroneous in view of the reliable, probative,
 
22           and substantial evidence on the whole record; or
 
23      (6)  Arbitrary, or capricious, or characterized by abuse of
 

 
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 1           discretion or clearly unwarranted exercise of
 
 2           discretion."
 
 3      SECTION 9.  Section 76-47, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "�76-47  Appeals from suspensions, dismissals and demotions.
 
 6 (a)  Any regular employee who is suspended, dismissed, or demoted
 
 7 may appeal to the civil service commission within twenty days
 
 8 after notice has been sent the employee of the suspension,
 
 9 dismissal, or demotion provided that the twenty-day period shall
 
10 be extended to twenty days from the final notice on the
 
11 employee's grievance should the employee exercise the grievance
 
12 channel.  Upon the appeal, both the appealing employee and the
 
13 appointing authority shall have the right to be heard publicly,
 
14 present evidence and be represented by counsel, who shall have
 
15 the right to examine and cross-examine witnesses.  At the hearing
 
16 technical rules of evidence shall not apply and the evidence
 
17 shall be taken stenographically or recorded by machine.  For the
 
18 purpose of hearing the appeals fairly and expeditiously, the
 
19 commission may at any time appoint a competent and qualified
 
20 disinterested person to act as its hearing officer.  The hearing
 
21 officer shall hear the matter in the same manner as if it were
 
22 before the commission and upon the conclusion of the hearing,
 
23 shall report the hearing officer's findings of fact and the
 

 
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 1 hearing officer's conclusions and recommendations based thereon
 
 2 to the commission and to the employee.  The commission shall
 
 3 render the final decision in accordance with [section 91-11.
 
 4      If the commission finds that the action appealed from was
 
 5 taken by the appointing authority for any political, religious or
 
 6 racial reason, the employee shall be reinstated to the employee's
 
 7 position without loss of pay for the period of the employee's
 
 8 suspension or separation therefrom.  In all other cases, if]
 
 9 section 76-14(b).  If the commission finds that the reasons for
 
10 the action are not substantiated in any material respect, the
 
11 commission shall order that the employee be reinstated in the
 
12 employee's position, without loss of pay, but if the commission
 
13 finds that the reasons are substantiated or are only partially
 
14 substantiated, the commission shall sustain the action of the
 
15 appointing authority, provided that the commission may modify the
 
16 action of the appointing authority if it finds the circumstances
 
17 of the case so require and may thereupon order such disposition
 
18 of the case as it may deem just.
 
19      When an employee is dismissed and not reinstated after the
 
20 appeal, the commission, in its discretion, may direct that the
 
21 employee's name be placed on an appropriate reemployment list for
 
22 employment in any similar position other than one from which the
 
23 employee has been removed.
 

 
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 1      The findings and decisions of the commission shall be final
 
 2 on all appeals, unless an appeal is taken as provided in chapter
 
 3 91.
 
 4      (b)  Notwithstanding any other law to the contrary, when an
 
 5 appeal hearing is before a county civil service commission,
 
 6 including the civil service commission of the city and county of
 
 7 Honolulu, the attorney general shall be counsel for the
 
 8 commission and the county attorney or corporation counsel shall
 
 9 be counsel for the appointing authority.  If, however, an appeal
 
10 hearing is before the state commission, the attorney general
 
11 shall be counsel for the appointing authority and the county
 
12 attorney or corporation counsel of the county, including the city
 
13 and county of Honolulu, in which the appeal hearing is being
 
14 conducted shall be counsel for the commission.
 
15      (c)  Notwithstanding any other law to the contrary, when the
 
16 decision and order of the county civil service commission,
 
17 including the civil service commission of the city and county of
 
18 Honolulu, is appealed as provided in chapter 91, the attorney
 
19 general shall be counsel for the commission and the county
 
20 attorney or corporation counsel shall be counsel for the
 
21 appointing authority.  When the decision and order of the state
 
22 civil service commission is appealed as provided in chapter 91,
 
23 the attorney general shall be counsel for the appointing
 

 
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 1 authority and the county attorney or corporation counsel of the
 
 2 county, including the city and county of Honolulu, in which the
 
 3 chapter 91 appeal is being conducted, shall be counsel for the
 
 4 state civil service commission."
 
 5      SECTION 10.  Section 76-121, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "�76-121  Employees of the Hawaii health systems
 
 8 corporation.  (a)  It is the intent of the legislature that the
 
 9 personnel of the Hawaii health systems corporation shall
 
10 constitute a separately administered part of the system of
 
11 personnel administration established by this chapter and chapter
 
12 77, unless specifically exempted by this chapter or any other
 
13 law; provided that:
 
14      (1)  The Hawaii health systems corporation shall have a
 
15           status coequal with the executive branch of the State
 
16           and with the several counties for purposes of:
 
17           (A)  Developing a position classification plan;
 
18           (B)  Formulating personnel rules; and
 
19           (C)  Administrating the Hawaii health systems
 
20                corporation personnel system, including
 
21                classification, reclassification, allocation, and
 
22                reallocation of a particular position; the
 
23                publication of a vacancy announcement; the
 

 
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 1                examination of applicants; and the preparation of
 
 2                eligible lists;
 
 3      (2)  In the development of a position classification plan,
 
 4           the formulation of personnel rules [and regulations],
 
 5           and the administration of the Hawaii health systems
 
 6           corporation personnel system, the corporation chief
 
 7           executive officer or the corporation chief executive
 
 8           officer's designee shall consult with the director of
 
 9           human resources development;
 
10      (3)  Any action of the corporation chief executive officer
 
11           or the corporation chief executive officer's designee
 
12           including:
 
13           (A)  The classification, reclassification, allocation,
 
14                and reallocation of a particular position;
 
15           (B)  The publication of a vacancy announcement;
 
16           (C)  The examination of applicants;
 
17           (D)  The preparation of an eligible list; and
 
18           (E)  Appeals from suspensions, dismissals, and
 
19                demotions not covered by collective bargaining;
 
20           may be appealed by any person, employee, or the
 
21           exclusive bargaining unit representative to the Hawaii
 
22           health systems corporation personnel appeals board.
 
23           The board shall be composed of three members, one
 

 
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 1           representative from the department of human resources
 
 2           development, one representative of the Hawaii health
 
 3           systems corporation, and one appropriate exclusive
 
 4           bargaining unit representative.  Section 26-34 shall
 
 5           not apply to the members of the Hawaii health systems
 
 6           corporation personnel appeals board.  The board shall
 
 7           sit as an appellate body on matters within the
 
 8           jurisdiction of the Hawaii health systems corporation
 
 9           with equal authority as the civil service commission
 
10           established by section 26-5; and
 
11      (4)  Nothing in chapters 76 and 77 shall be construed to
 
12           require the governor or any executive agency for the
 
13           Hawaii health systems corporation to approve positions
 
14           in the corporation.
 
15      (b)  Upon review of the record, the Hawaii health systems
 
16 corporation personnel appeals board may affirm the decision of
 
17 the Hawaii health systems corporation chief executive officer or
 
18 remand the case with instructions for further proceedings; or it
 
19 may reverse or modify the decision and order if the substantial
 
20 rights of the petitioners may have been prejudiced because the
 
21 chief executive officer's findings, conclusions, decisions, or
 
22 orders are:
 
23      (1)  In violation of constitutional or statutory provisions;
 

 
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 1      (2)  In excess of the statutory authority or jurisdiction of
 
 2           the chief executive officer;
 
 3      (3)  Made upon unlawful procedure;
 
 4      (4)  Affected by other error of law;
 
 5      (5)  Clearly erroneous in view of the reliable, probative,
 
 6           and substantial evidence on the whole record; or
 
 7      (6)  Arbitrary, or capricious, or characterized by abuse of
 
 8           discretion or clearly unwarranted exercise of
 
 9           discretion."
 
10      SECTION 11.  Section 77-7, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "�77-7 Appeal board procedure.  [It] Except as otherwise
 
13 provided by law, it shall be mandatory that the appeal board
 
14 established under section 77-4(c) shall comply with chapter 91 in
 
15 all respects[.]; provided that upon review of the record, the
 
16 appeal board may affirm the decision of the director of human
 
17 resources development or remand the case with instructions for
 
18 further proceedings; or it may reverse or modify the decision and
 
19 order if the substantial rights of the petitioners may have been
 
20 prejudiced because the director's findings, conclusions,
 
21 decisions, or orders are:
 
22      (1)  In violation of constitutional or statutory provisions;
 
23      (2)  In excess of the statutory authority or jurisdiction of
 

 
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 1           the director;
 
 2      (3)  Made upon unlawful procedure;
 
 3      (4)  Affected by other error of law;
 
 4      (5)  Clearly erroneous in view of the reliable, probative,
 
 5           and substantial evidence on the whole record; or
 
 6      (6)  Arbitrary, or capricious, or characterized by abuse of
 
 7           discretion or clearly unwarranted exercise of
 
 8           discretion."
 
 9      SECTION 12.  Section 77-8, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "�77-8 Functions of the commission.  (a)  The commission
 
12 shall hear and decide appeals by employees and department heads
 
13 from actions taken by the director under this part, except as to
 
14 appeals concerning the compensation plan.
 
15      (b)  The appeal shall be made within twenty days after
 
16 notice of the action has been sent to the person and shall be
 
17 heard in the manner provided in chapter 91[.]; provided that upon
 
18 review of the record, the commission may affirm the decision of
 
19 the director or remand the case with instructions for further
 
20 proceedings; or it may reverse or modify the decision and order
 
21 if the substantial rights of the petitioners may have been
 
22 prejudiced because the director's findings, conclusions,
 
23 decisions, or orders are:
 

 
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 1      (1)  In violation of constitutional or statutory provisions;
 
 2      (2)  In excess of the statutory authority or jurisdiction of
 
 3           the director;
 
 4      (3)  Made upon unlawful procedure;
 
 5      (4)  Affected by other error of law;
 
 6      (5)  Clearly erroneous in view of the reliable, probative,
 
 7           and substantial evidence on the whole record; or
 
 8      (6)  Arbitrary, or capricious, or characterized by abuse of
 
 9           discretion or clearly unwarranted exercise of
 
10           discretion."
 
11                             Part III
 
12      SECTION 13.  The purpose of this part is to allow the State
 
13 and counties to interpret, administer, and apply their own
 
14 personnel classification and compensation systems.
 
15      SECTION 14.  Section 76-2, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "�76-2 Uniform interpretation.  [It is the intent of the
 
18 legislature that the construction and interpretation of any of
 
19 the provisions of this chapter and of chapter 77 be uniform for
 
20 the State and the several counties.
 
21      All questions requiring the construction or interpretation
 
22 of any of the provisions of this chapter or of chapter 77 shall
 
23 be submitted to the attorney general for an opinion and the
 

 
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 1 attorney general shall render an opinion promptly on any such
 
 2 question when requested by the head of any department of the
 
 3 State or any county.  In case the opinion is in conflict with an
 
 4 opinion rendered upon the same or substantially similar question
 
 5 by any county attorney or corporation counsel and the question
 
 6 upon which the opinion is rendered has been raised by a county,
 
 7 the question may, either at the instance of the county attorney,
 
 8 corporation counsel or the attorney general, be submitted to the
 
 9 circuit court of the first judicial circuit for a declaratory
 
10 judgment on the question, and jurisdiction to hear and determine
 
11 the questions is hereby conferred upon the circuit court.  The
 
12 circuit court shall determine the question without delay.] In
 
13 order to promote uniformity in the interpretation of this chapter
 
14 and chapter 77, the attorney general and the county attorney or
 
15 corporation counsel of each county shall meet at least once each
 
16 year at the call of the director of human resources development
 
17 of the State."
 
18      SECTION 15.  Section 76-3, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "�76-3 Uniform administration.  [It is the intent of the
 
21 legislature that the system of personnel administration
 
22 established by this chapter and chapter 77 shall be as uniformly
 
23 administered as is practicable.]  In order to promote [such]
 

 
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 1 uniformity[,] in the administration of this chapter and chapter
 
 2 77, the several commissioners and directors of the state
 
 3 department of human resources development and of the county
 
 4 departments of civil service, the administrative director of the
 
 5 courts, and the Hawaii health systems corporation chief executive
 
 6 officer's designee shall meet at least once each year at the call
 
 7 of the director of human resources development of the State."
 
 8      SECTION 16.  Section 77-10, Hawaii Revised Statutes, is
 
 9 amended by amending subsection (d) to read as follows:
 
10      "(d)  The rules shall be adopted only after joint conference
 
11 of the state director and all county commissions [and shall] but
 
12 need not be uniformly applied and interpreted throughout the
 
13 State and the several counties."
 
14                              Part IV
 
15      SECTION 17.  The purpose of this part is to:
 
16      (1)  Establish employee benefits by law, rather than
 
17           collective bargaining negotiations; and
 
18      (2)  Link employee compensation and benefits together for
 
19           planning, programming, and budgeting purposes;
 
20 in order to allow the legislature to better evaluate and control
 
21 long-term employee costs.
 
22      SECTION 18.  Section 88-8, Hawaii Revised Statutes, is
 
23 amended by amending subsection (h) to read as follows:
 

 
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 1      "(h)  Notwithstanding any other law to the contrary,
 
 2 retirement benefits for the optional retirement system of the
 
 3 University of Hawaii shall be [a subject of collective bargaining
 
 4 negotiations for bargaining unit (7).] established by law."
 
 5      SECTION 19.  Section 89-2, Hawaii Revised Statutes, is
 
 6 amended as follows:
 
 7      1.  By amending the definition of "collective bargaining" to
 
 8 read:
 
 9      ""Collective bargaining" means the performance of the mutual
 
10 obligations of the public employer and the exclusive
 
11 representative to meet at reasonable times, to confer and
 
12 negotiate in good faith, and to execute a written agreement with
 
13 respect to wages, hours, [amounts of contributions by the State
 
14 and counties to the Hawaii public employees health fund,] and
 
15 other terms and conditions of employment, except that by any such
 
16 obligation neither party shall be compelled to agree to a
 
17 proposal, or be required to make a concession."
 
18      2.  By amending the definition of "cost items" to read:
 
19      ""Cost items" includes wages, hours, [amounts of
 
20 contributions by the State and counties to the Hawaii public
 
21 employees health fund,] and other terms and conditions of
 
22 employment, the implementation of which requires an appropriation
 
23 by a legislative body."
 

 
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 1      3.  By amending the definition of "employee organization" to
 
 2 read:
 
 3      ""Employee organization" means any organization of any kind
 
 4 in which public employees participate and which exists for the
 
 5 primary purpose of dealing with public employers concerning
 
 6 grievances, labor disputes, wages, hours, [amounts of
 
 7 contributions by the State and counties to the Hawaii public
 
 8 employees health fund,] and other terms and conditions of
 
 9 employment of public employees."
 
10      4.  By amending the definition of "mediation" to read:
 
11      ""Mediation" means assistance by an impartial third party to
 
12 reconcile an impasse between the public employer and the
 
13 exclusive representative regarding wages, hours, [amounts of
 
14 contributions by the State and counties to the Hawaii public
 
15 employees health fund,] and other terms and conditions of
 
16 employment through interpretation, suggestion, and advice to
 
17 resolve the impasse."
 
18      SECTION 20.  Section 89-9, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  The employer and the exclusive representative shall
 
21 meet at reasonable times, including meetings in advance of the
 
22 employer's budget-making process, and shall negotiate in good
 
23 faith with respect to wages, hours, the number of incremental and
 

 
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 1 longevity steps and movement between steps within the salary
 
 2 range, [the amounts of contributions by the State and respective
 
 3 counties to the Hawaii public employees health fund to the extent
 
 4 allowed in subsection (e),] and other terms and conditions of
 
 5 employment which are subject to negotiations under this chapter
 
 6 and which are to be embodied in a written agreement, or any
 
 7 question arising thereunder, but such obligation does not compel
 
 8 either party to agree to a proposal or make a concession;
 
 9 provided that the parties may not negotiate with respect to cost
 
10 items as defined by section 89-2 for the biennium 1999 to 2001,
 
11 and the cost items of employees in bargaining units under section
 
12 89-6 in effect on June 30, 1999, shall remain in effect until
 
13 July 1, 2001."
 
14      SECTION 21.  Section 89-9, Hawaii Revised Statutes, is
 
15 amended by amending subsection (d) to read as follows:
 
16      "(d)  Excluded from the subjects of negotiations are matters
 
17 of employee benefits established by law, classification and
 
18 reclassification, benefits of [but not] and contributions to the
 
19 Hawaii public employees health fund, retirement benefits [except
 
20 as provided in section 88-8(h)], and the salary ranges now
 
21 provided by law; provided that the number of incremental and
 
22 longevity steps, the amount of wages to be paid in each range and
 
23 step, and movement between steps within the salary range shall be
 

 
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 1 negotiable.  The employer and the exclusive representative shall
 
 2 not agree to any proposal which would be inconsistent with merit
 
 3 principles or the principle of equal pay for equal work pursuant
 
 4 to sections 76-1, 76-2, 77-31, and 77-33, or which would
 
 5 interfere with the rights of a public employer to (1) direct
 
 6 employees; (2) determine qualification, standards for work, the
 
 7 nature and contents of examinations, hire, promote, transfer,
 
 8 assign, and retain employees in positions and suspend, demote,
 
 9 discharge, or take other disciplinary action against employees
 
10 for proper cause; (3) relieve an employee from duties because of
 
11 lack of work or other legitimate reason; (4) maintain efficiency
 
12 of government operations; (5) determine methods, means, and
 
13 personnel by which the employer's operations are to be conducted;
 
14 and take such actions as may be necessary to carry out the
 
15 missions of the employer in cases of emergencies; provided that
 
16 the employer and the exclusive representative may negotiate
 
17 procedures governing the promotion and transfer of employees to
 
18 positions within a bargaining unit, procedures governing the
 
19 suspension, demotion, discharge or other disciplinary actions
 
20 taken against employees, and procedures governing the layoff of
 
21 employees; provided further that violations of the procedures so
 
22 negotiated may be the subject of a grievance process agreed to by
 
23 the employer and the exclusive representative."
 

 
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 1      SECTION 22.  Section 89-11, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (d) to read as follows:
 
 3      "(d)  If a dispute between a public employer and the
 
 4 exclusive representative of appropriate bargaining unit (2),
 
 5 supervisory employees in blue collar positions; appropriate
 
 6 bargaining unit (3), nonsupervisory employees in white collar
 
 7 positions; appropriate bargaining unit (4), supervisory employees
 
 8 in white collar positions; appropriate bargaining unit (6),
 
 9 educational officers and other personnel of the department of
 
10 education under the same salary schedule; appropriate bargaining
 
11 unit (8), personnel of the University of Hawaii and the community
 
12 college system, other than faculty; optional appropriate
 
13 bargaining unit (9), registered professional nurses; optional
 
14 appropriate bargaining unit (10), institutional, health, and
 
15 correctional workers; optional appropriate bargaining unit (11),
 
16 firefighters; optional appropriate bargaining unit (12), police
 
17 officers; or optional appropriate bargaining unit (13),
 
18 professional and scientific employees, other than registered
 
19 professional nurses, exists over the terms of an initial or
 
20 renewed agreement more than ninety working days after written
 
21 notification by either party to initiate negotiations, either
 
22 party may give written notice to the board that an impasse exists
 
23 and the board shall assist in the voluntary resolution of the
 

 
Page 25                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 impasse by appointing a mediator within three days after the date
 
 2 of impasse.  If the dispute continues to exist fifteen working
 
 3 days after the date of impasse, the dispute shall be submitted to
 
 4 arbitration proceedings as provided [herein.] in this section.
 
 5      The board shall immediately determine whether the parties to
 
 6 the dispute have mutually agreed upon an arbitration procedure
 
 7 and whether the parties have agreed upon a person or persons whom
 
 8 the parties desire to be appointed as the arbitrator or as a
 
 9 panel of arbitrators, as the case may be.
 
10      If the board determines that an arbitration procedure
 
11 mutually agreed upon by the parties will result in a final and
 
12 binding decision, and that an arbitrator or arbitration panel has
 
13 been mutually agreed upon, it shall appoint such arbitrator or
 
14 arbitration panel and permit the parties to proceed with the
 
15 arbitration procedure mutually agreed upon.
 
16      If, after eighteen working days from the date of impasse,
 
17 the parties have not mutually agreed upon an arbitration
 
18 procedure and an arbitrator or arbitration panel, the board shall
 
19 immediately notify the employer and the exclusive representative
 
20 that the issues in dispute shall be submitted to a three-member
 
21 arbitration panel who shall follow the arbitration procedure
 
22 provided [herein.] in this section.
 
23      Within twenty-one working days from the date of impasse, two
 

 
Page 26                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 members of the arbitration panel shall be selected by the
 
 2 parties; one shall be selected by the employer and one shall be
 
 3 selected by the exclusive representative.  The impartial third
 
 4 member of the arbitration panel shall be selected by the two
 
 5 previously selected panel members and shall chair the arbitration
 
 6 panel.
 
 7      In the event that the two previously selected arbitration
 
 8 panel members fail to select an impartial third arbitrator within
 
 9 twenty-four working days from the date of impasse, the board
 
10 shall request the American Arbitration Association, or its
 
11 successor in function, to furnish a list of five qualified
 
12 arbitrators from which the impartial arbitrator shall be
 
13 selected.  Within five calendar days after receipt of such list,
 
14 the parties shall alternately strike names therefrom until a
 
15 single name is left, who shall be immediately appointed by the
 
16 board as the impartial arbitrator and chairperson of the
 
17 arbitration panel.
 
18      Upon the selection and appointment of the arbitration panel,
 
19 each party shall submit to the panel, in writing, with copy to
 
20 the other party, a final offer which shall include all provisions
 
21 in any existing collective bargaining agreement not being
 
22 modified, all provisions already agreed to in negotiations, and
 
23 all further provisions [other than those relating to
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 contributions by the State and respective counties to the Hawaii
 
 2 public employees health fund] which each party is proposing for
 
 3 inclusion in the final agreement.
 
 4      Within twenty calendar days of its appointment, the
 
 5 arbitration panel shall commence a hearing at which time the
 
 6 parties may submit either in writing or through oral testimony,
 
 7 all information or data supporting their respective final offers.
 
 8 Nothing in this section shall be construed to prohibit the
 
 9 parties from reaching a voluntary settlement on the unresolved
 
10 issues, with or without the assistance of a mediator, at any time
 
11 prior to the conclusion of the hearing conducted by the
 
12 arbitration panel.
 
13      Within thirty calendar days after the conclusion of the
 
14 hearing, a majority of the arbitration panel shall issue a final
 
15 and binding decision.
 
16      In reaching a decision, the arbitration panel shall give
 
17 weight to the factors listed below and shall include in a written
 
18 opinion an explanation of how the factors were taken into account
 
19 in reaching the decision:
 
20      (1)  The lawful authority of the employer.
 
21      (2)  Stipulations of the parties.
 
22      (3)  The interests and welfare of the public.
 
23      (4)  The financial ability of the employer to meet these
 

 
Page 28                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1           costs.
 
 2      (5)  The present and future general economic condition of
 
 3           the counties and the State.
 
 4      (6)  Comparison of wages, hours, and conditions of
 
 5           employment of the employees involved in the arbitration
 
 6           proceeding with the wages, hours, and conditions of
 
 7           employment of other persons performing similar
 
 8           services, and of other state and county employees in
 
 9           Hawaii.
 
10      (7)  The average consumer prices for goods or services,
 
11           commonly known as the cost of living.
 
12      (8)  The overall compensation presently received by the
 
13           employees, including direct wage compensation,
 
14           vacation, holidays and excused time, insurance and
 
15           pensions, medical and hospitalization benefits, the
 
16           continuity and stability of employment, and all other
 
17           benefits received.
 
18      (9)  Changes in any of the foregoing circumstances during
 
19           the pendency of the arbitration proceedings.
 
20     (10)  Such other factors, not confined to the foregoing,
 
21           which are normally or traditionally taken into
 
22           consideration in the determination of wages, hours, and
 
23           conditions of employment through voluntary collective
 

 
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 1           bargaining, mediation, fact-finding, arbitration, or
 
 2           otherwise between the parties, in the public service or
 
 3           in private employment.
 
 4      The decision of the arbitration panel shall be final and
 
 5 binding upon the parties on all provisions submitted to the
 
 6 arbitration panel.  [If the parties have reached agreement with
 
 7 respect to the amounts of contributions by the State and counties
 
 8 to the Hawaii public employees health fund by the tenth working
 
 9 day after the arbitration panel issues its decision, the final
 
10 and binding agreement of the parties on all provisions shall
 
11 consist of the panel's decision and the amounts of contributions
 
12 agreed to by the parties.  If the parties have not reached
 
13 agreement with respect to the amounts of contributions by the
 
14 State and counties to the Hawaii public employees health fund by
 
15 the close of business on the tenth working day after the
 
16 arbitration panel issues its decision, the parties shall have
 
17 five days to submit their respective recommendations for such
 
18 contributions to the legislature, if it is in session, and if the
 
19 legislature is not in session, the parties shall submit their
 
20 respective recommendations for such contributions to the
 
21 legislature during the next session of the legislature.  In such
 
22 event, the final and binding agreement of the parties on all
 
23 provisions shall consist of the panel's decision and the amounts
 

 
Page 30                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 of contributions established by the legislature by enactment,
 
 2 after the legislature has considered the recommendations for such
 
 3 contributions by the parties.  It is strictly understood that no
 
 4 member of a bargaining unit subject to this subsection shall be
 
 5 allowed to participate in a strike on the issue of the amounts of
 
 6 contributions by the State and counties to the Hawaii public
 
 7 employees health fund.]  The parties shall take whatever action
 
 8 is necessary to carry out and effectuate the final and binding
 
 9 agreement.  The parties may, at any time and by mutual agreement,
 
10 amend or modify the panel's decision.
 
11      Agreements reached pursuant to the decision of an
 
12 arbitration panel [and the amounts of contributions by the State
 
13 and counties to the Hawaii public employees health fund, as
 
14 provided herein,] shall not be subject to ratification by the
 
15 employees concerned.  All items requiring any moneys for
 
16 implementation shall be subject to appropriations by the
 
17 appropriate legislative bodies and the employer shall submit all
 
18 such items within ten days after the date on which the agreement
 
19 is entered into as provided [herein,] in this section, to the
 
20 appropriate legislative bodies.
 
21      The costs for mediation shall be borne by the board.  All
 
22 other costs incurred by either party in complying with these
 
23 provisions, including the costs of its selected member on the
 

 
Page 31                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 arbitration panel, shall be borne by the party incurring them,
 
 2 except that all costs and expenses of the impartial arbitrator
 
 3 shall be borne equally by the parties."
 
 4                              Part V
 
 5      SECTION 23.  Chapter 76, Hawaii Revised Statutes, is amended
 
 6 by adding a new section to be appropriately designated and to
 
 7 read as follows:
 
 8      "�76-     Administrative rules; exempt from public notice
 
 9 and public hearing requirements of chapter 91.  Notwithstanding
 
10 any other law to the contrary, including section 76-17, any rules
 
11 adopted under this chapter shall not be subject to the public
 
12 notice and public hearing requirements of chapter 91."
 
13      SECTION 24.  Chapter 77, Hawaii Revised Statutes, is amended
 
14 by adding a new section to be appropriately designated and to
 
15 read as follows:
 
16      "�77-     Administrative rules; exempt from public notice
 
17 and public hearing requirements of chapter 91.  Notwithstanding
 
18 any other law to the contrary, any rules adopted under this
 
19 chapter shall not be subject to the public notice and public
 
20 hearing requirements of chapter 91."
 
21      SECTION 25.  Section 76-17, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "�76-17  Rules [and regulations]; policies and standards.
 

 
Page 32                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 In conformity with chapter 91, the director of human resources
 
 2 development shall [prescribe] adopt rules [and regulations] to
 
 3 carry out this chapter [which shall have the force and effect of
 
 4 law.]; provided that the rules shall not be subject to the public
 
 5 notice and public hearing requirements of chapter 91.  The rules
 
 6 [and regulations] may include any matter not inconsistent with
 
 7 law concerning the establishment and maintenance of a system of
 
 8 personnel management based on merit principles, including [but
 
 9 not limited to] matters set forth in this chapter[, and may be
 
10 amended or repealed in like manner as the same were adopted].
 
11 The rules [and regulations] shall be in conformity with
 
12 principles of good public administration and shall be in
 
13 conformity with sections 76-18 to 76-43."
 
14                              Part VI
 
15      SECTION 26.  The auditor shall conduct an audit of the civil
 
16 service and compensation system established pursuant to chapters
 
17 76 and 77, Hawaii Revised Statutes, to determine the system's
 
18 compliance with article XVI, section 1, of the Constitution of
 
19 the State of Hawaii, regarding the merit principle.  The auditor
 
20 shall submit its findings and recommendations to the legislature
 
21 not less than twenty days prior to the convening of the regular
 
22 session of 2002.
 
23      SECTION 27.  There is appropriated out of the general
 

 
Page 33                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 revenues of the State of Hawaii the sum of $        , or so much
 
 2 thereof as may be necessary for fiscal year 2000-2001, to carry
 
 3 out the purposes of this part.  The sum appropriated shall be
 
 4 expended by the auditor.
 
 5                             Part VII
 
 6      SECTION 28.  The purpose of this part is to prevent the
 
 7 consideration of any legislative measure that establishes an
 
 8 exempt position until the auditor, by concurrent resolution,
 
 9 prepares and submits to the legislature a report that assesses
 
10 the need to exempt the position from the civil service law.
 
11      SECTION 29.  Section 76-16, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "�76-16  Civil service and exemptions.  The civil service to
 
14 which this part applies shall comprise all positions in the State
 
15 now existing or hereafter established and embrace all personal
 
16 services performed for the State, except the following:
 
17      (1)  Commissioned and enlisted personnel of the Hawaii
 
18           national guard as such, and positions in the Hawaii
 
19           national guard that are required by state or federal
 
20           laws or regulations or orders of the national guard to
 
21           be filled from those commissioned or enlisted
 
22           personnel;
 
23      (2)  Positions filled by persons employed by contract where
 

 
Page 34                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1           the director of human resources development has
 
 2           certified that the service is special or unique or is
 
 3           essential to the public interest and that, because of
 
 4           circumstances surrounding its fulfillment, personnel to
 
 5           perform the service cannot be obtained through normal
 
 6           civil service recruitment procedures.  Any such
 
 7           contract may be for any period not exceeding one year;
 
 8      (3)  Positions of a temporary nature needed in the public
 
 9           interest where the need for the position does not
 
10           exceed one year, but before any person may be employed
 
11           to render the temporary service, the director shall
 
12           certify that the service is of a temporary nature and
 
13           that recruitment through normal civil service
 
14           recruitment procedures is not practicable;
 
15      (4)  Positions filled by the legislature or by either house
 
16           or any committee thereof;
 
17      (5)  Employees in the office of the governor and household
 
18           employees at Washington Place;
 
19      (6)  Positions filled by popular vote;
 
20      (7)  Department heads, officers, and members of any board,
 
21           commission, or other state agency whose appointments
 
22           are made by the governor or are required by law to be
 
23           confirmed by the senate;
 

 
Page 35                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1      (8)  Judges, referees, receivers, masters, jurors, notaries
 
 2           public, land court examiners, court commissioners, and
 
 3           attorneys appointed by a state court for a special
 
 4           temporary service;
 
 5      (9)  One bailiff for the chief justice of the supreme court
 
 6           who shall have the powers and duties of a court officer
 
 7           and bailiff under section 606-14; one secretary or
 
 8           clerk for each justice of the supreme court, each judge
 
 9           of the intermediate appellate court, and each judge of
 
10           the circuit court; one secretary for the judicial
 
11           council; one deputy administrative director of the
 
12           courts; three law clerks for the chief justice of the
 
13           supreme court, two law clerks for each associate
 
14           justice of the supreme court and each judge of the
 
15           intermediate appellate court, one law clerk for each
 
16           judge of the circuit court, two additional law clerks
 
17           for the civil administrative judge of the circuit court
 
18           of the first circuit, two additional law clerks for the
 
19           criminal administrative judge of the circuit court of
 
20           the first circuit, one additional law clerk for the
 
21           senior judge of the family court of the first circuit,
 
22           two additional law clerks for the civil motions judge
 
23           of the circuit court of the first circuit, two
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           additional law clerks for the criminal motions judge of
 
 2           the circuit court of the first circuit, and two law
 
 3           clerks for the administrative judge of the district
 
 4           court of the first circuit; and one private secretary
 
 5           for the administrative director of the courts, the
 
 6           deputy administrative director of the courts, each
 
 7           department head, each deputy or first assistant, and
 
 8           each additional deputy, or assistant deputy, or
 
 9           assistant defined in paragraph (16);
 
10     (10)  First deputy and deputy attorneys general, the
 
11           administrative services manager of the department of
 
12           the attorney general, one secretary for the
 
13           administrative services manager, an administrator and
 
14           any support staff for the criminal and juvenile justice
 
15           resources coordination functions, and law clerks;
 
16     (11)  Teachers, principals, vice-principals, district
 
17           superintendents, chief deputy superintendents, other
 
18           certificated personnel, and not more than twenty
 
19           noncertificated administrative, professional, and
 
20           technical personnel not engaged in instructional work
 
21           in the department of education, the special assistant
 
22           to the state librarian, one secretary for the special
 
23           assistant to the state librarian, and members of the
 

 
Page 37                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1           faculty of the University of Hawaii, including research
 
 2           workers, extension agents, personnel engaged in
 
 3           instructional work, and administrative, professional,
 
 4           and technical personnel of the university;
 
 5     (12)  Employees engaged in special, research, or
 
 6           demonstration projects approved by the governor;
 
 7     (13)  Positions filled by inmates, kokuas, patients of state
 
 8           institutions, persons with severe physical or mental
 
 9           handicaps participating in the work experience training
 
10           programs, and students and positions filled through
 
11           federally funded programs that provide temporary public
 
12           service employment such as the federal Comprehensive
 
13           Employment and Training Act of 1973;
 
14     (14)  A custodian or guide at Iolani Palace, the Royal
 
15           Mausoleum, and Hulihee Palace;
 
16     (15)  Positions filled by persons employed on a fee,
 
17           contract, or piecework basis, who may lawfully perform
 
18           their duties concurrently with their private business
 
19           or profession or other private employment and whose
 
20           duties require only a portion of their time, if it is
 
21           impracticable to ascertain or anticipate the portion of
 
22           time to be devoted to the service of the State;
 
23     (16)  Positions of first deputies or first assistants of each
 

 
Page 38                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1           department head appointed under or in the manner
 
 2           provided in section 6, Article V, of the State
 
 3           Constitution; three additional deputies or assistants
 
 4           either in charge of the highways, harbors, and airports
 
 5           divisions or other functions within the department of
 
 6           transportation as may be assigned by the director of
 
 7           transportation, with the approval of the governor; four
 
 8           additional deputies in the department of health, each
 
 9           in charge of one of the following:  behavioral health,
 
10           environmental health, hospitals, and health resources
 
11           administration, including other functions within the
 
12           department as may be assigned by the director of
 
13           health, with the approval of the governor; an
 
14           administrative assistant to the state librarian; and an
 
15           administrative assistant to the superintendent of
 
16           education;
 
17     (17)  Positions specifically exempted from this part by any
 
18           other law; provided that [all]:
 
19           (A)  All of the positions defined by paragraph (9)
 
20                shall be included in the position classification
 
21                plan; and
 
22           (B)  Before any legislative measure that establishes an
 
23                exempt position can be considered, there shall be
 

 
Page 39                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1                concurrent resolutions passed requesting the
 
 2                auditor to prepare and submit to the legislature a
 
 3                report that assesses the need to exempt the
 
 4                position from this chapter.  The concurrent
 
 5                resolutions shall designate a specific legislative
 
 6                bill that has been introduced in the legislature.
 
 7                This subparagraph shall apply to all exempt
 
 8                positions established after January 1, 2001;
 
 9     (18)  Positions in the state foster grandparent program and
 
10           positions for temporary employment of senior citizens
 
11           in occupations in which there is a severe personnel
 
12           shortage or in special projects;
 
13     (19)  Household employees at the official residence of the
 
14           president of the University of Hawaii;
 
15     (20)  Employees in the department of education engaged in the
 
16           supervision of students during lunch periods and in the
 
17           cleaning of classrooms after school hours on a less
 
18           than half-time basis;
 
19     (21)  Employees hired under the tenant hire program of the
 
20           housing and community development corporation of
 
21           Hawaii; provided that not more than twenty-six per cent
 
22           of the corporation's work force in any housing project
 
23           maintained or operated by the corporation shall be
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           hired under the tenant hire program;
 
 2     (22)  Positions of the federally funded expanded food and
 
 3           nutrition program of the University of Hawaii that
 
 4           require the hiring of nutrition program assistants who
 
 5           live in the areas they serve;
 
 6     (23)  Positions filled by severely handicapped persons who
 
 7           are certified by the state vocational rehabilitation
 
 8           office that they are able to perform safely the duties
 
 9           of the positions;
 
10     (24)  One public high school student to be selected by the
 
11           Hawaii state student council as a nonvoting member on
 
12           the board of education as authorized by the State
 
13           Constitution;
 
14     (25)  Sheriff, first deputy sheriff, and second deputy
 
15           sheriff; and
 
16     (26)  A gender and other fairness coordinator hired by the
 
17           judiciary.
 
18      The director shall determine the applicability of this
 
19 section to specific positions.
 
20      Nothing in this section shall be deemed to affect the civil
 
21 service status of any incumbent as it existed on July 1, 1955."
 
22                             Part VIII
 
23      SECTION 30.  The purpose of this part is to resolve all
 

 
Page 41                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 conflicts between state law and collective bargaining agreements
 
 2 in favor of state law.
 
 3      SECTION 31.  Section 89-19, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      ["�89-19  Chapter takes precedence, when.  This chapter
 
 6 shall take precedence over all conflicting statutes concerning
 
 7 this subject matter and shall preempt all contrary local
 
 8 ordinances, executive orders, legislation, or rules adopted by
 
 9 the State, a county, or any department or agency thereof,
 
10 including the departments of human resources development or of
 
11 personnel services or the civil service commission."]
 
12                              Part IX
 
13      SECTION 32.  The purpose of this part is to allow civil
 
14 service positions to be filled by the best applicants, whether or
 
15 not the applicants are already within public service.  Beginning
 
16 July 1, 2003, this part abolishes the practice of giving first
 
17 consideration to applicants already within public service, and of
 
18 making noncompetitive promotions.
 
19      SECTION 33.  Section 76-5.5, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "�76-5.5  Recruitment flexibility for the counties, the
 
22 judiciary, and the Hawaii health systems corporation.
 
23 Notwithstanding section 76-23, or any other provision to the
 

 
Page 42                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 contrary, the directors of the county departments of civil
 
 2 service, the administrative director of the courts, and the
 
 3 Hawaii health systems corporation chief executive officer's
 
 4 designee may determine, establish, and maintain the manner in
 
 5 which positions shall be filled in accordance with section 78-1
 
 6 and the following standards:
 
 7      (1)  Equal opportunity for all regardless of race, sex, age,
 
 8           religion, color, ancestry, physical handicap, or
 
 9           politics;
 
10     [(2)  First consideration for competent employees already
 
11           within public service;] and
 
12     [(3)] (2)  Impartial selection of the ablest person through
 
13           competitive means which are fair, objective, and
 
14           practical[.], whether or not the person is already
 
15           within public service."
 
16      SECTION 34.  Section 76-11, Hawaii Revised Statutes, is
 
17 amended by amending the definition of "eligible list" to read as
 
18 follows:
 
19    "(13)  "Eligible list" means a list of persons who have been
 
20           found qualified for appointment to a position in a
 
21           particular class[, such a list being either open-
 
22           competitive, promotional, or reemployment];"
 
23      SECTION 35.  Section 76-22.5, Hawaii Revised Statutes, is
 

 
Page 43                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 amended to read as follows:
 
 2      "�76-22.5  Recruitment flexibility.  Notwithstanding section
 
 3 76-23, the director of human resources development shall
 
 4 determine, establish, and maintain the manner in which positions
 
 5 shall be filled in accordance with section 78-1 and the following
 
 6 standards:
 
 7      (1)  Equal opportunity for all regardless of race, sex, age,
 
 8           religion, color, ancestry, physical handicap, or
 
 9           politics;
 
10     [(2)  First consideration for competent employees already
 
11           within public service;] and
 
12     [(3)] (2)  Impartial selection of the ablest person through
 
13           competitive means which are fair, objective, and
 
14           practical[.], whether or not the person is already
 
15           within public service."
 
16      SECTION 36.  Section 76-23, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "�76-23  Filling vacancy.(a)  All vacant civil service
 
19 positions shall be filled in the manner prescribed in [this part]
 
20 section 76-5.5 or 76-22.5, or in section 78-1.
 
21      (b)  Whenever there is a position to be filled, the
 
22 appointing authority shall request the director of human
 
23 resources development to submit a list of eligibles.  The
 

 
Page 44                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 director shall thereupon certify a list of five or such fewer
 
 2 number as may be available, taken from [eligible lists in the
 
 3 following order: first the] the appropriate promotional lists,
 
 4 [second the] recall lists, [third the] reemployment lists, and
 
 5 [fourth the] open-competitive lists[;], without regard to the
 
 6 order of the lists and based only on the examination scores of
 
 7 the eligibles; provided that laid-off regular employees shall be
 
 8 placed on an appropriate recall list; provided further that with
 
 9 respect to the eligibles under unskilled classes, the director
 
10 shall certify all of the eligibles on [such] the list.  Where
 
11 there is more than one vacant position in a class to be filled,
 
12 the director may certify an additional eligible for each
 
13 additional vacancy.  The director shall submit eligibles in the
 
14 order that they appear on the eligible list before applying
 
15 veteran's preference; provided that veterans whose examination
 
16 scores, after addition of applicable preference, are equal to or
 
17 exceed the examination score of the last eligible certified,
 
18 shall also be certified; and further provided that if the last
 
19 eligible to be certified is one of two or more eligibles who have
 
20 identical examination scores, then those two or more eligibles
 
21 shall be certified notwithstanding the fact that more than five
 
22 persons are thereby certified to fill a vacancy; and further
 
23 provided that for each eligible without resident preference
 

 
Page 45                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 certified, a resident who has filed a resident income tax return
 
 2 within the State or who has been claimed as a dependent on a
 
 3 resident income tax return, as provided by section 78-1, shall
 
 4 also be certified.  When there is no material difference between
 
 5 the qualifications of the eligibles concerned, the eligible with
 
 6 the longest continuous civil service employment within the State
 
 7 or county filling the vacant position shall receive first
 
 8 consideration for the position, but shall not mandate it.
 
 9      (c)  In any case where there are three or more eligibles in
 
10 one department whose names appear as eligibles on an
 
11 interdepartmental list, upon the request of the appointing
 
12 authority of the department those three or more names shall be
 
13 certified to the appointing authority as eligibles on an
 
14 intradepartmental eligible list; but where the interdepartmental
 
15 list has been in existence for more than six months and there are
 
16 five or more persons in the department qualified for the class,
 
17 the department may request an intradepartmental promotional
 
18 examination, in which case the director shall hold either an
 
19 interdepartmental or an intradepartmental promotional
 
20 examination.  The order in which eligibles are placed on eligible
 
21 lists shall be fixed in the manner prescribed by subsection (b)
 
22 or by rule.  The appointing authority shall make the appointment
 
23 only from the list of eligibles certified to the appointing
 

 
Page 46                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1 authority unless the appointing authority finds no acceptable
 
 2 person on the list certified by the director, in which case the
 
 3 appointing authority shall reject the list and request the
 
 4 director to submit a new list, in which event the director shall
 
 5 submit a new list of eligibles selected in like manner; provided
 
 6 that the appointing authority states reasons in writing for
 
 7 rejecting each of the eligibles on the list previously certified
 
 8 to the appointing authority by the director or, in case of the
 
 9 counties, by the civil service commission.  Eligible lists, other
 
10 than the recall and reemployment lists, shall be effective for
 
11 one year but this period may be extended by the director.
 
12     [(d)  After giving appropriate notice, an appointing
 
13 authority may fill a vacant position by promoting any regular
 
14 employee of the department without examination; provided that:
 
15      (1)  The employee meets the minimum qualifications of the
 
16           class and vacant position;
 
17      (2)  The noncompetitive promotion shall be based on
 
18           appropriate selection documentation indicating that the
 
19           person promoted is the best qualified; and
 
20      (3)  When there is no material difference between the
 
21           qualifications of the employees concerned, the employee
 
22           with the longest continuous civil service employment
 
23           within the State or county granting the promotion shall
 

 
Page 47                                                    2870
                                     H.B. NO.           
                                                        
                                                        

 
 1           receive first consideration for the promotion.
 
 2      Any regular employee receiving any such promotion without
 
 3 examination shall be ineligible for a second promotion without
 
 4 examination prior to such employee having completed one year of
 
 5 satisfactory service in the position to which the employee was so
 
 6 promoted, but the employee may at any time be eligible for a
 
 7 promotion to any position through examination.
 
 8      (e)  An employee filling a permanent position temporarily
 
 9 vacant may be given a permanent appointment to the position if it
 
10 later develops that the vacancy will be permanent, provided the
 
11 employee was originally appointed from an appropriate eligible
 
12 list and the appointing authority certifies that the employee has
 
13 been performing the duties of the position in a satisfactory
 
14 manner.]"
 
15      SECTION 37.  Section 76-27, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "�76-27  Probationary service and other requirements for
 
18 membership.  All employees shall successfully serve an initial
 
19 probation period before becoming members of the civil service.
 
20 In addition, membership in the civil service shall require that
 
21 the employee shall have been appointed in accordance with law and
 
22 shall have satisfied all the requirements for employment
 
23 prescribed by this chapter or by the rules adopted thereunder,
 

 
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 1 including those qualifications prescribed by section 78-1.  A
 
 2 member who is promoted or transferred to another position in the
 
 3 civil service may be required to serve a new probation period in
 
 4 the new position but shall be entitled to all the rights and
 
 5 privileges of a member of the civil service, except the right to
 
 6 appeal a dismissal from the new position (as distinguished from
 
 7 dismissal from the service) for inefficiency during the
 
 8 probationary period, in which case the member shall be returned
 
 9 to the former position.
 
10      [An employee who is serving a temporary appointment may
 
11 subsequently be given a probationary appointment in the same
 
12 position or a related position in the same class within the
 
13 department whenever a permanent position is established or is
 
14 vacated; provided that the employee has been hired initially from
 
15 the appropriate eligible list and the temporary period of service
 
16 has immediately preceded the change to probationary status.  Upon
 
17 certification by the appointing authority that the employee has
 
18 been performing satisfactorily and that the duties the employee
 
19 has been performing are essentially similar to those required of
 
20 the probationary appointment, the period of service performed as
 
21 a temporary appointee shall be subtracted from the probationary
 
22 period required by this section, and the employee shall serve
 
23 only the remaining period, if any, as a probationary employee.]"
 

 
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 1      SECTION 38.  This part shall take effect on July 1, 2003.
 
 2                              Part X
 
 3      SECTION 39.  The purpose of this part is to:
 
 4      (1)  Downsize state government through normal attrition to
 
 5           effect needed cost savings and to maintain employment
 
 6           security in the work force; and
 
 7      (2)  Permit filling of essential positions through internal
 
 8           transfers or promotions and external hires for certain
 
 9           classifications such as teachers and adult corrections
 
10           officers.
 
11      SECTION 40.  Notwithstanding any other law to the contrary,
 
12 and effective from July 1, 2000 to June 30, 2003, the maximum
 
13 number of permanent positions that the executive, the judiciary,
 
14 and the office of Hawaiian affairs are authorized for all
 
15 programs during fiscal year 2000-2001, fiscal year 2001-2002, and
 
16 fiscal year 2002-2003:
 
17      (1)  Shall not exceed the position ceilings for the
 
18           executive, the judiciary, and the office of Hawaiian
 
19           affairs specified in the Supplemental Appropriations
 
20           Act of 2000, the Judiciary Supplemental Appropriations
 
21           Act of 2000, and the office of Hawaiian affairs budget
 
22           for fiscal year 2000-2001, respectively; and
 
23      (2)  Shall be reduced at the beginning of each fiscal
 

 
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 1           quarter, starting with the second quarter of fiscal
 
 2           year 2000-2001, by the number of full-time equivalent
 
 3           permanent positions made vacant during the preceding
 
 4           fiscal quarter, starting with the first quarter of
 
 5           fiscal year 2000-2001, for reasons other than
 
 6           promotion, dismissal, or demotion.
 
 7      SECTION 41.  The executive, the judiciary, and the office of
 
 8 Hawaiian affairs may transfer positions within their respective
 
 9 authorized position ceilings for the purposes of maximizing the
 
10 utilization of personnel resources and staff productivity;
 
11 provided that:
 
12      (1)  All such actions shall be made with the prior approval
 
13           of the governor, the chief justice, and the chairperson
 
14           of the board of trustees of the office of Hawaiian
 
15           affairs, respectively;
 
16      (2)  This transfer flexibility shall be authorized only for
 
17           fiscal year 2000-2001, fiscal year 2001-2002, and
 
18           fiscal year 2002-2003; and
 
19      (3)  The governor, the chief justice, and the chairperson of
 
20           the board of trustees of the office of Hawaiian
 
21           affairs, respectively, shall submit reports on all such
 
22           transfers to the legislature not less than twenty days
 
23           prior to the convening of the regular sessions of 2001,
 

 
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 1           2002, 2003, and 2004.
 
 2      SECTION 42.  This part shall not apply to:
 
 3      (1)  Any positions described in section 76-16, Hawaii
 
 4           Revised Statutes;
 
 5      (2)  Any positions in the following programs:
 
 6           (A)  EDN 100 - SCHOOL-BASED BUDGETING;
 
 7           (B)  EDN 150 - COMPREHENSIVE SCHOOL SUPPORT SERVICES;
 
 8           (C)  EDN 200 - INSTRUCTIONAL SUPPORT;
 
 9           (D)  EDN 400 - SCHOOL SUPPORT;
 
10           (E)  EDN 500 - SCHOOL COMMUNITY SERVICE;
 
11           (F)  EDN 407 - PUBLIC LIBRARIES;
 
12           (G)  AGS 807 - PHYSICAL PLANT OPERATIONS & MAINTENANCE-
 
13                AGS;
 
14           (H)  AGS 808 - STUDENT TRANSPORTATION;
 
15           (I)  PSD 402 - HALAWA CORRECTIONAL FACILITY;
 
16           (J)  PSD 403 - KULANI CORRECTIONAL FACILITY;
 
17           (K)  PSD 404 - WAIAWA CORRECTIONAL FACILITY;
 
18           (L)  PSD 405 - HAWAII COMMUNITY CORRECTIONAL CENTER;
 
19           (M)  PSD 406 - MAUI COMMUNITY CORRECTIONAL CENTER;
 
20           (N)  PSD 407 - OAHU COMMUNITY CORRECTIONAL CENTER;
 
21           (O)  PSD 408 - KAUAI COMMUNITY CORRECTIONAL CENTER;
 
22           (P)  PSD 409 - WOMEN'S COMMUNITY CORRECTIONAL CENTER;
 
23           (Q)  UOH 100 - UNIVERSITY OF HAWAII, MANOA;
 

 
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 1           (R)  UOH 210 - UNIVERSITY OF HAWAII, HILO;
 
 2           (S)  UOH 700 - UNIVERSITY OF HAWAII, WEST OAHU;
 
 3           (T)  UOH 800 - UNIVERSITY OF HAWAII, COMMUNITY
 
 4                COLLEGES;
 
 5           and
 
 6      (3)  Any positions whose source of funding is federal funds.
 
 7      SECTION 43.  The governor, the chief justice, and the
 
 8 chairperson of the office of Hawaiian affairs shall submit
 
 9 enhanced voluntary separation plans to the legislature for review
 
10 and, if appropriate, approval not less than twenty days prior to
 
11 the convening of the regular sessions of 2001, 2002, and 2003 if
 
12 this part does not begin to reduce the size and cost of state
 
13 government by the forth quarter of fiscal year 2000-2001.
 
14      SECTION 44.  The governor, the chief justice, and the
 
15 chairperson of the board of trustees of the office of Hawaiian
 
16 affairs shall examine the relevance and levels of service and
 
17 programs being provided by state government, and the manner and
 
18 procedures employed in their administration.  This examination
 
19 shall include the involvement of government employees and the
 
20 public they serve.
 
21      SECTION 45.  Nothing in this part shall be construed to
 
22 prohibit the governor, the chief justice, or the chairperson of
 
23 the board of trustees of the office of Hawaiian affairs from
 

 
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 1 imposing cuts beyond the scope of this part.
 
 2                              Part XI
 
 3      SECTION 46.  The purpose of this part is to establish and
 
 4 maintain a system of performance ratings for the purpose of
 
 5 allowing individual employees and individual groups of employees
 
 6 in the civil service to appraise their own service; to validate
 
 7 their self-appraisal through external means, including review by
 
 8 neutral peers; and to improve their performance through a
 
 9 coordinated system of in-service training.
 
10      SECTION 47.  Section 76-41, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "�76-41  Performance ratings.  (a)  There shall be
 
13 established and maintained a system of performance ratings for
 
14 the purpose of appraising the service of employees in the civil
 
15 service and improving the employees' performance.  Each
 
16 department shall rate each employee under its jurisdiction in
 
17 accordance with the system and shall, upon request by the
 
18 director of the respective jurisdiction, transmit the final
 
19 performance ratings to the director of human resources
 
20 development.  A copy of the final performance rating shall be
 
21 given to the affected employee, and the original shall be filed
 
22 in the employee's official personnel file.
 
23      The department head shall inform an employee in writing
 

 
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 1 whenever the employee's performance in the employee's position is
 
 2 substandard.  The employee shall also be notified in the notice
 
 3 and from time to time thereafter as may be necessary, of the
 
 4 manner in which the employee's performance is substandard.
 
 5      (b)  There shall be established and maintained a system of
 
 6 performance ratings for the purpose of allowing individual
 
 7 employees and individual groups of employees in the civil service
 
 8 to appraise their own service; to validate their self-appraisal
 
 9 through external means, including review by neutral peers; and to
 
10 improve their performance through a coordinated system of in-
 
11 service training."
 
12                             Part XII
 
13      SECTION 48.  The purpose of this part is to require the
 
14 department of human resources development, through its employee
 
15 assistance program, to offer all regular state employees and
 
16 their exclusive collective bargaining unit representatives
 
17 supervised electronic access to non-confidential job information
 
18 that can be used to enhance career decision making.
 
19      SECTION 49.  The department of human resources development,
 
20 through its employee assistance program, shall offer all regular
 
21 state employees and their exclusive collective bargaining unit
 
22 representatives supervised electronic access to non-confidential
 
23 job information that can be used to enhance career decision
 

 
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 1 making, including interactive programs designed for self-
 
 2 assessment, career planning and transitioning, workforce re-
 
 3 engineering, and job searching based on available occupational
 
 4 databases.  Subject to the availability of funds, the department
 
 5 of human resources development may make this offer available to
 
 6 employees in the judiciary.
 
 7      SECTION 50.  There is appropriated out of the general
 
 8 revenues of the State of Hawaii the sum of $        , or so much
 
 9 thereof as may be necessary for fiscal year 2000-2001, to carry
 
10 out the purposes of this part.  The sum appropriated shall be
 
11 expended by the department of human resources development.
 
12      SECTION 51.  This part shall take effect on July 1, 2000.
 
13                             Part XIII
 
14      SECTION 52.  This Act shall not be applied so as to impair
 
15 any collective bargaining agreement existing as of the effective
 
16 date of this Act in a manner violative of either the Hawaii
 
17 Constitution or Article I, section 10, of the United States
 
18 Constitution.
 
19      SECTION 53.  If any provision of this Act, or the
 
20 application thereof to any person or circumstance is held
 
21 invalid, the invalidity does not affect other provisions or
 
22 applications of the Act which can be given effect without the
 
23 invalid provision or application, and to this end the provisions
 

 
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 1 of this Act are severable.
 
 2      SECTION 54.  It is the intent of this Act not to create an
 
 3 illegal result, to jeopardize the receipt of any federal aid, nor
 
 4 to impair the obligation of the State or any agency thereof to
 
 5 the holders of any bond issued by the State or by any such
 
 6 agency, and to the extent, and only to the extent, necessary to
 
 7 effectuate this intent, the governor, the chief justice, and the
 
 8 chairperson of the board of trustees of the office of Hawaiian
 
 9 affairs may modify the strict provisions of this Act, but shall
 
10 promptly report any such modification with reasons therefor to
 
11 the legislature at its next session thereafter for review by the
 
12 legislature.
 
13      SECTION 55.  All acts passed by the legislature during the
 
14 regular session of 2000, whether enacted before or after the
 
15 effective data of this Act, shall be amended to conform to this
 
16 Act unless those acts specifically provide that this Act is being
 
17 amended.
 
18      SECTION 56.  If any provisions in this Act are found to be
 
19 in conflict with any laws that were in existence on the effective
 
20 date of this Act, the provisions of this Act shall control.
 
21      SECTION 57.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 
23      SECTION 58.  This Act shall take effect upon its approval.
 
24 
 
25                           INTRODUCED BY:_________________________
 

 
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