SB 1530: RELATING TO THE UNIVERSITY OF HAWAII.

A BILL FOR AN ACT

relating to the university of hawaii.

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

     SECTION 1.  The legislature finds that Act 67, Session Laws of Hawaii 2015, required the department of budget and finance to work with one state department on a pilot project to develop efficiency measures for possible inclusion in various documents that are required to be prepared under part IV of chapter 37, Hawaii Revised Statutes, governing the State's executive budget, and that the university of Hawaii volunteered to participate in the project.

     The legislature also finds that section 28 of Act 119, Session Laws of Hawaii 2015 (Act 119), required the university of Hawaii to allocate appropriated general funds to various programs in accordance with performance-based outcomes relating to student achievement and degree attainment and articulation established by the president of the university of Hawaii.  Act 119 tasked the president of the university of Hawaii with devising the metrics and standards for the performance-based outcomes and submitting a report to the legislature on the implementation of the performance-based budget allocation requirement, including a recommendation on whether the requirement should be made permanent.  The legislature additionally finds that the university of Hawaii submitted a recommendation that the performance-based budget allocation requirement should be made permanent.

     The legislature further finds that requiring the board of regents to allocate funds to university of Hawaii program IDs according to performance-based outcomes relating to student achievement and degree attainment is a matter of statewide concern pursuant to article X, section 6, of the Hawaii State Constitution.

     Accordingly, the purpose of this Act is to:

     (1)  Codify in statute the requirements that:

          (A)  The board of regents or the president of the university of Hawaii allocate general funds appropriated to the university of Hawaii to university of Hawaii program IDs in accordance with performance-based outcomes relating to student achievement and degree attainment and articulation as determined by the president of the university; and

          (B)  The president of the university submit annual reports to the legislature on the performance‑based outcomes budget allocation requirement; and

     (2)  Require the president of the university to:

          (A)  Propose at least three efficiency measures to the director of finance to produce a more effective budget; and

          (B)  Submit reports to the legislature on efficiency measures attained by the university before the convening of the regular sessions of 2026 and 2027.

     This Act shall be known as the University of Hawaii Efficiency Act of 2025.

     SECTION 2.  Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to subpart B of part V to be appropriately designated and to read as follows:

     "§304A-    General fund appropriations; performance-based outcome funding; report.  (a)  The board of regents may transfer general fund appropriations for the university of Hawaii to other university of Hawaii program IDs in accordance with performance-based outcomes established at the lowest unit of study relating to student achievement and degree attainment and articulation as determined by the president of the university; provided that the president of the university may transfer the funds pursuant to this subsection if the authority is delegated to the president of the university by the board of regents.

     (b)  The amount transferred to a university of Hawaii program ID pursuant to subsection (a) shall be expended at the discretion of the head of the university of Hawaii college, campus, or school of that program ID.

     (c)  The president of the university shall devise the metrics and standards for the performance-based outcomes in accordance with sections 304A-304 and 304A-2001.

     (d)  Any amount that is not transferred to a university of Hawaii program ID for the purposes of this section shall lapse to the general fund at the end of each fiscal year.

     (e)  The president of the university shall submit a report of their findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session detailing:

     (1)  The distribution of funds by campus; and

     (2)  A discussion of changes implemented and being recommended to better operationalize and maintain rigor."

     SECTION 3.  (a)  The president of the university of Hawaii shall propose at least three efficiency measures to the director of finance for review and approval; provided that the director of finance may approve efficiency measures that differ from those proposed by the president of the university of Hawaii.

     (b)  No later than twenty days prior to the convening of the regular sessions of 2026 and 2027, the president of the university shall submit the following to the legislature:

     (1)  The actual level of the efficiency measures attained in fiscal years 2025-2026, the estimated level of the efficiency measures for fiscal year 2026-2027, and the estimated level for reach of the next six fiscal years.  The percentage change from fiscal year to fiscal year of the efficiency measures shall also be reported;

     (2)  A narrative and comments on the change in efficiency measures from fiscal year to fiscal year; and

     (3)  Any intended action to improve efficiency.

     The information shall be submitted concurrently with, but need not be included in, the budget documents for the executive budget for fiscal biennium 2027-2029.

     (c)  For the purposes of this section:

     "Budget document" means a multi-year program and financial plan.

     "Efficiency measure" means the costs within the lowest level of a program to produce a single unit of an activity or effectiveness measure of that level of the program.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

UH; BOR; Director of Finance; President of the University of Hawaii; Performance-Based Outcome Funding Program; Efficiency Measures; Reports

Description:

Requires the Board of Regents or the President of the University of Hawaii to allocate general funds appropriated to the University of Hawaii to University of Hawaii program IDs in accordance with performance-based outcomes relating to student achievement and degree attainment.  Requires the President to submit reports to the Legislature.  Requires the President to propose at least three efficiency measures to the Director of Finance to produce a more effective budget.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 787

Honolulu, Hawaii

RE:    S.B. No. 1530

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 1530 entitled:

"A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"

begs leave to report as follows:

     The purpose and intent of this measure is to improve the performance of the University of Hawaii System.

     Specifically, this measure:

     (1)  Authorizes the Board of Regents of the University of Hawaii to transfer general fund appropriations among program IDs in accordance with performance-based outcomes;

     (2)  Requires the President of the University of Hawaii to devise metrics and standards for the performance-based outcomes;

     (3)  Requires the President of the University of Hawaii to submit annual reports to the Legislature on the distribution of funds under the performance-based outcome funding;

     (4)  Requires that the President of the University of Hawaii to propose at least three efficiency measures to the Director of Finance; and

     (5)  Requires the President of the University of Hawaii to submit to the Legislature details on changes in efficiency, a narrative and comments on efficiency measures, and intended actions to improve efficiency.

     Your Committee received written comments on this measure from the University of Hawaii System.

     Your Committee finds that authorizing the Board of Regents of the University of Hawaii to transfer general funds among the University of Hawaii program IDs will encourage schools of those programs to increase graduation rates, improve student transfer rates, and make other enhancements to meet performance-based standards.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1530 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 453

Honolulu, Hawaii

RE:    S.B. No. 1530

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Higher Education, to which was referred S.B. No. 1530 entitled:

"A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require that the Board of Regents or the President of the University of Hawaii allocate general funds appropriated to the University of Hawaii to University of Hawaii program IDs in accordance with performance‑based outcomes relating to student achievement and degree attainment; and

     (2)  Require the President of the University of Hawaii to submit reports to the Legislature and propose at least three efficiency measures to the Director of Finance to produce a more effective budget.

     Your Committee received comments on this measure from the Department of Budget and Finance and University of Hawaiʻi System.

     Your Committee finds that the University of Hawaii volunteered to participate in a pilot project offered by the Department of Budget and Finance to develop efficiency measures for possible inclusion in various documents that are required to be prepared for the Executive Budget pursuant to Act 67, Session Laws of Hawaii 2015 (Act 67).  Your Committee further finds that section 28 of Act 119, Session Laws of Hawaii 2015 (Act 119), required that the University of Hawaii allocate appropriated general funds to various programs in accordance with performance‑based outcomes relating to student achievement and degree attainment according to metrics and standards devised by the President of the University of Hawaii.  Your Committee also finds that pursuant to Act 119, the University of Hawaii submitted a report to the Legislature and recommended that the performance‑based budget allocation requirement be made permanent.  This measure makes permanent the provisions of Act 67 and Act 119 to ensure that the University of Hawaii operates efficiently for the benefit of students and the State.

     As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1530 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Higher Education,