House Standing Committee on Higher Education

Now calling to order the House Committee on Higher Education. It is Wednesday, February 18, 2026, 2:05 pm here in Conference Room 309 of the State Capitol. We just have a few bills on our agenda today, prior to the first lateral deadline this week. So let's get right into it. Up first, House Bill 2519 relating to the University of Hawaii.

This Bill establishes law corporations and increases fiscal flexibility for uh, establishes a UH Budget Stabilization Fund, authorizes limited procurement and fiscal exemptions, and implements performance-based funding metrics, requires annual fiscal and performance reporting to the Legislature and provides a transition framework for the move to block budgeting. Up first, we have the University of Hawaii via Zoom.

Good afternoon, Chair Garrett, Vice Chair Amato, and Members of the Committee. Luis Salaveria, Vice President and CFO for the University of Hawaii System. And you know, just want to thank you for the opportunity to provide testimony in support of House Bill 2519.

You know, a Bill that really represents a fundamental shift in a sea change really in how government funds higher education. It really transitions us from an activity based funding institution to one more in line with outcomes and performance results.

And especially in light of the growing challenges in higher education, the operational and fiscal flexibility that this Bill creates could really give us the tools to effectively and efficiently meet those challenges head-on. And with that, I'll stand on the rest of our testimony, and we'll be available to answer any questions that you may have.

Thank you again. Chair, Vice Chair.

Okay, thank you, Luis. Up next, do we have the Procurement Office on via Zoom? Okay, Bonnie, go ahead. Providing comments.

Afternoon. Good afternoon, Chair, Vice Chair, Members of Committee, Bonnie Kahakui, Administrator, State Procurement Office, will stand in our written testimony providing comments regarding the exemption from 103D and available for questions. Mahalo.

Okay, thank you, Bonnie. Is there anyone else wishing to testify on HB 2519? Seeing none. Members, please note we also have testimony from the Department of Budget and Finance, providing comments and support from the University of Hawaii Professional Assembly. Any questions? Luis? I have a few questions if you don't mind hopping back on.

Sure, Chair.

So what are some of the current challenges with the line item model that UH operates under? I mean, I know we heard from NCAMS when we had an informational briefing back in January that UH is very unique in this regard. So could you just educate the Committee on some of the challenges of this model?

So I think, you know, especially with line item, line item budgeting as well as, you know, budgeting at different institutions, you know, in many ways the University is a system but we are 10 different institutions and the ability to act synergically, know the synergy between, you know, our institutions can get hampered by, by the way that funding actually occurs right now.

I mean a prime example of what we're dealing with or it's something that, you know, the President has been really good in trying to find operational efficiencies most recently is, you know, the establishment of a single chancellor to work with both Leeward and University of West Oahu.

But because those funding mechanisms are into different program IDs have individual line items, it really becomes more activity based versus performance and outcome based.

When you're looking at how can you create more synergy, how can you create more better enrollment, how can you get better, you know, graduates out of looking at it as an entire system going forward. So the opportunity to have like block granting, block granting, block funding. I'm sorry.

And you know, it's kind of unique, I mean in many ways, you know, because I've been involved in this thing for so long. I mean I've seen the way that government has budgeted and you know, there are pros and cons in both ways.

And in this particular case, I think the university, because of the way we operate, because of what we're facing going forward, it, you know, activity based and you know, specific line item funding does really kind of hamper our ability to operate efficiently throughout the whole, you know, 10 campus wide system.

Okay, thank you for that. Just as a follow up, to your knowledge, what is a typical funding model like for peer institutions on the continent? Is it more of like a block grant model or is it done some other way?

It's kind of hit or miss. I mean I think in anyways there are block grant fundings. I mean we actually have, within the state of Hawaii we do have a degree of block grant funding. I mean the Department of Education, you know, the entire school system is funded through EDN 100. It's one program ID.

So there are, I mean granted, I think this is a little bit more, more robust in what's being proposed in this Bill because there are, you know, performance metrics, their requirements, their transparency provisions allowed for, I mean quarterly budgetary, you know, reporting and variance reporting does provide, I think higher level of oversight as well as transparency versus maybe what exists in other areas within state government.

But I think other peer institutions on the mainland kind of provide for a lot of flexibility in system wide institutions because again the ability to operate efficiently between campuses can only be achieved when you know, when those campuses are funded together versus separately.

Okay, thank you, VP. Members, any other questions? Okay, if not, we'll move on to the next Bill. House Bill 2409 related to the University of Hawaii. This Bill establishes the Hawaii Geological Survey in UH HILO, designates the Director of the survey rather than the Geophysics and Planetology Institute specialist qualified in geology as the state geologist.

Up first, we have the University of Hawaii. Hilo. Do you zoom.

Good afternoon. Chair Garrett. Vice Chair Amato, Kalei Rapoza. Vice Chancellor for Administration at the University of Hawaii Hilo. We send in support of this Bill. We do ask, though, that if a geological survey is established at the University of Hawaii at Hilo. That it be sufficiently funded with General funds.

I'm here and available to answer any questions if you have them.

Okay, thank you, Kalei. Up next, DLNR. Are they available in the room, providing comments?

Well, Chair, Vice Chair Dean Uyeno with the Commission on Water Resource Management. On behalf of the Department, the Department stands on written testimony available if you have any comments or questions.

Okay, Appreciate it. Thank you. Up next, Attorney General.

Good afternoon. The Department of the Attorney General recommends identifying the law. Identifying the Bill as a law of statewide concern. Thank you.

Okay. I had a feeling you were going to say that. Thank you. Thank you, Candace. Is there anyone else in the room wishing to testify? House Bill 2409. Seeing none. Members, please note we also have support from one individual. Members, any questions? Seeing none. Kale, I have one for you.

Regarding your request for sufficient funding, do you have any idea what that might be to establish this program?

Chair, Sorry, I don't have a good number for you. I think a rough estimate might be in the neighborhood of 200,000. That would be for the position of the state geologist and an operating budget for the unit. I will note. Sorry. Several years ago, we, UH Hilo accepted the Pisces program from DBEDT.

And when that measure in 2021 passed, it included a proviso for a special Fund. I think that would be a good idea to have for this type of. For the survey at UH, Hilo, because we would then be able to generate some revenue and be able to take in grants from the Fed.

So I think that might be a good thing to consider, and I'd be willing to have discussions with your staff or other committees to see how we can flesh that out.

Okay, thank you very much. Members. Any other questions? House Bill 2409. Moving on to the third Bill on our agenda. House Bill 2141 HD1, relating to state enterprise zones. This Bill Expands the activities that would be considered an eligible business activity for businesses within an enterprise zone to qualify for enterprise zone benefits.

Authorizes DBEDT to declare up to two areas in the state to be designated as an enterprise zone subject to the Governor's approval. Defective data. 713000 up first we have DBEDT.

Hello, Chair. Vice Chair Jason Usijima on behalf of DBEDT.

DBEDT stands on our written testimony. Operating comments.

Okay, thank you. DBED standing under supportive testimony. Thank you. ADC Agribusiness Development Corporation. Are they here, not present. Also submitted testimony in support HCBA. Are they present? Not seeing them either. Providing comments via zoom. Do we have the tax Foundation?

Aloha and good afternoon. Colleen Paramari of the Tax Foundation of Hawaii. The Tax foundation of Hawaii stands on its return testimony. Mahalo

Okay, thank you very much. Providing comments. Do we have the Hawaii Food Industry association on zoom? Not present also or testifying in support. Okay, is there anyone else in the room wishing to testify on House Bill 2141 HD1 seeing none.

Members please note we also have testimony and support from the county of Hawaii Ocean at Laboratories, the Maui Chamber of Commerce, an individual and comments from Pacific Rimland Inc. Members. Any questions? House Bill 2121 HD1 saying none. We'll move on to the last Bill on this agenda.

House Bill 2233, HD 1, related to the Supplemental Nutrition Assistance Program - Education Program. This bill appropriates funds to UH CTAHR and the Department of Health to continue their implementation of the Hawaii Supplemental Nutrition Assistance Program - Education Program. Defective date of 7-1-3000. Up first, we have CTAHR providing comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. Phyllis Shimabukuro-Geiser for Dean Parwinder Grewal. We stand on our written testimony offering comments. Thank you.

Okay, thank you, Phyllis. Up next, Department of Health testifying in support.

Thank you, Chair and Vice Chair, Members of the Committee. The Department of Health stands in support, and we appreciate your support for HB 2233, HD 1. In concert with CTAHR, we have been working on educating people who are eligible for SNAP benefits.

And so while CTAHR has worked on providing individual nutrition education, we have then taken the public health approach and working on systemic changes and environmental changes so that people who have the information will have then the opportunity for sustainable agriculture to have the foods available in their communities.

And so we have supported things like food huis and also build projects for physical activity. And so we have been in communication with CTAHR and Rep Marten in Human Services did ask us for appropriation amount.

And we did mention that between Dean Grewal and the Department of Health, he said that $600,000 per organization would be about the amount that we had been getting through USDA. So we do thank you for the opportunity to provide testimony.

Okay, thank you, Lola. Up next, we have the Hawaii Public Health Institute. Thought I saw Nate here earlier. Might have stepped out. Testimony in support via Zoom. I assume the Hawaii Food Industry Association is not available either. Okay. Also testimony in support. Is Mr. Matsuoka available? Okay.

Yeah, I'm here. Aloha, Chair Garrett, Vice Chair Amato. Hello. Okay. My name is H. Doug Matsuoka, and I strongly support HB 2233. I did submit written testimony, and I won't repeat that. I just want to say I'm 73 years old and retired in 2024 after a career mostly in nonprofits.

20 years of that with social service nonprofits. I'm a member of the senior advocacy group Kokua Council, and I'm also former director of the organization. Last year I applied for and qualified for EBT when I found. Then I found the program called Food Grow that I thought would be helpful for me and fellow seniors.

I found out it was a component of Hawaii's SNAP Ed Program, but that it had been cancelled. I did some research and found out it was a program with many community projects statewide and had a public benefit beyond just seniors. And I think actually the greatest benefit is probably for young low income families and their kids. The resources are still available on NutritionCenter.CTAHR.edu website.

They list what a nutritious meal should be, how to shop for it, how to grow some of it, how to prepare it. It's still up at their website. The program has impact studies that shows it works. It says close to a noncontroversial, low cost, low risk, high public benefit item that there is at this year's legislative session. So I urge you to pass HB 2233. Mahalo.

Okay. Thank you, Mr. Matsuoka, for your testimony. Is there anyone else in the room wishing to testify on House Bill 2233, HD 1? Seeing none. Members, please note we also have testimony in support from the Executive Office on Early Learning, Hawaii Appleseed, Hawaii Farm Bureau, Catholic Charities Hawaii, Hawaii Hunger Action Network, and several individuals.

And comments from the Executive Office on Aging. Members, any questions? House Bill 2233, HD 1. I was going to ask the Department of Health for the amount, but thank you, Lola, for mentioning that it will be 600,000 each for the Department of Health and CTAHR.

I know that number was not available when the Human Services Committee heard this bill. So we will reflect that in the committee report. Okay, Members, any other questions? Seeing none. We'll take a short recess. Recess.

Now reconvening the House Committee on Higher Education for purposes of decision making. Members, four bills today before the first lateral deadline on Friday. For the first Bill, house bill 2519 related to university of Hawaii. This was the Bill we had some discussion on regarding increasing fiscal flexibility for UH.

As we mentioned in our during the testimony portion of that Bill, one of the recommendations that came from ncams. This is the national organization that provided the analysis on systems governance and whatnot.

We had an informational briefing back in January and they pointed out the uniqueness of the funding model for UH So I thought it was important that we at least entertain that discussion about some of the challenges with the current line item budgeting that UH has historically experienced.

And that was the, this Bill was the end product of that. I recognize this is a first step. It's a pretty drastic change from the way UH is currently funded. But nonetheless I think it's important that we continue to deliberate how to give UH that flexibility and a little more fiscal autonomy in this changing higher education environment.

So with that the sheriff's recommendation is going to be to pass this out with an HD one. Members, just because of the first lateral deadline, I didn't have a chance to circulate an HD one prior to this vote. So if you'll just bear with me as I verbalize the changes I'll be proposing.

Okay, so first I want to try to have a Bill that addresses all the concerns that we heard today from UH, the Department of Budget and Finance as well as the State Procurement Office. So there was some concerns raised by the Department of Budget and Finance regarding the carry forward cap and some constitutional compliance issues.

So this Bill is going to allow. I'm sorry, my first proposed change is to allow UH to retain up to 10% of its General Fund block appropriation. Right now it's, it's an open ended amount. We're going to specify that any retained funds must lapse at after three fiscal years if unexpended.

So they just can't sit on the money forever. We're going to make explicit reference to Article 7, Section 11 of the Constitution to ensure compliance with that appropriation lapse requirements. There was a provision in there regarding allowing transfers from CIP budgets to operating. We're going to strike that out entirely.

You know, budget and Finance did say that there's challenges there with bond compliance and, you know, potential liabilities. So we will heed their recommendation and remove that altogether. The procurement threshold. You know, I appreciate the State Procurement Office testimony regarding the exemption. What we'll do right now, the Bill reads that has a threshold at 500,000.

What we'll do is blank it out for further discussion and try to figure out if there's an appropriate amount for that. But even with the exemption, we'll require, UH to adhere to the core principles of Chapter 103D, that's the procurement chapter, including, you know, competition, transparency, ethical standards and whatnot.

And then we also required annual report to the Legislature on all contracts exceeding a blank amount. We'll try to figure out what the appropriate amount is. So there is some reporting requirements that will be included there. Let's see. Transparency reporting.

We want to just make sure again that we're informed and as to how UH is using their block appropriations. So we are requiring them to submit an annual report to the Legislature detailing internal allocations of those funds, transfers between major categories, the use and balance of the Stabilization Fund, and then performance outcomes tied to institutional goals.

The Bill as currently drafted has a performance metrics section, but it does say that it would be jointly determined by the Legislature and university. The recommendation here is to strike the legislature's role in that. I believe UH should have the autonomy to set those metrics themselves.

So we're going to change the language to have the Board of Regents establish those metrics. And again, these metrics and annual outcomes are going to be reported to the Legislature on an annual basis. And again, this respects the Article 10 Governance, Authority and autonomy. UH, also pointed out their testimony. There's a couple of program IDs.

UOH881, which is Aquaria, and UOH220, which is a small business development center. We're going to remove those from the block appropriation structure. And then lastly, we'll add a defective date of 713000 to facilitate further discussion.

I know that was again, a mouthful and I thank you for your indulgence, but I think it's really important that we just continue this discussion and encourage the fundamental finance Committee to take a look at this and see if it warrants further discussion. So with that, Members, any comments? Casing then Vice chair for the vote, please.

HD 1

thank you, Chair. Okay, Members, we are voting on HB 2519. Chair's recommendation is passed with amendments. Chair and Vice chair, vote aye. Representative Evsland Aye. Representative Capella? Aye. Representative Keela?

Aye.

Representative Le Lachica? Aye. Representative Olds? Aye. Representative Woodson? Aye. Representative Muraoca? Aye. Representative Souza. I thank you Chair. Your recommendation is adopted.

Okay, thank you Members. Next Bill, House Bill 2409 relating to the University of Hawaii. This is the Bill regarding the Hawaii Geological Survey at UH Hilo Members, my recommendation here is going to be to defer the Bill. We did hear from UH Hilo that they support the intent.

But I felt that the DLNR testimony was very compelling that this isn't just an academic exercise. There are public safety requirements that are needed of a geological survey. You know, rockfalls and whatnot. So. And UH HILO was not quite sure what the amount would be that they would need to stand this up.

So the recommendation here is just to defer and encourage the introducer to work with UH HILO a little bit further to flesh this out. New discussion. ... House Bill 2141 HD1 related to state enterprise zones. So this Bill initially was a higher ed ECD than fin referral. We referred it to let ECD take the lead.

I did speak to the introducer as well as the ECD Chair and the same. We talk about the best way forward on this. I think the current version. That's. Before this Committee no longer applies to higher education. It's pretty broad in terms of how these enterprise zones would work.

So having conferred with the introducer and having received prior concurrence, the Chair's recommendation is to actually revert back to the Bill as introduced.

House Bill 2141 which this would do was limit this easy the enterprise zone to a Kakaoka Makai track where uh Jabsom and the QH Cancer center is held with the intention being setting up a biomedical health innovation hub on that portion and again narrowing the scope here and then seeing what happens from there on. So.

And we'll also keep a defective date or add a defective date to that. So the Chair's recommendation Here is an HD2 verting back to the Bill as introduced with a defective date. Any discussion? Okay, seeing none. Vice Chair for The vote please HD2.

Thank you Chair. Voting on HB 2141 HD1 Chairs recommendation is passed with amendments. Chair and Vice Chair both voting aye and noting the presence of all Members. Are there any Members with reservations? Any Members choosing to vote? No, seeing none. Thank you Chair. Your recommendation is adopted.

Okay. Thank you, Members. Last bill on the agenda, House Bill 2233, HD 1. This is the SNAP ED Program. Very strong support across the board, as we would expect. Right now, the bill already contains a blank appropriation. We will keep it blank. And it already has a defective date, which we will maintain as well.

But we will reflect in the committee report that DOH and CTAHR believe they need about $600,000 for each entity for a total of 1.2 million. For is a reference for Finance should they consider carrying this bill in the next or after lateral. Members, any discussion? House Bill 2230, HD 1, as is.

Thank you, Chair. Voting on HB 2233, HD 1. Chair's recommendation is to pass as is. Noting the presence of all Members. Are there any Members with reservations? Any Members choosing to vote no? Thank you, Chair. Your recommendation is adopted.

Okay. And with that, we are adjourned. Thank you, everyone.