REPORT TITLE: 
Omnibus government efficiency
DESCRIPTION:
Establishes an omnibus approach to improving government
efficiency by requiring zero based budgeting, amending the State
Plan to adopt competition in government as a State policy, and
requiring the Hawaii Revised Statutes to be published using
competitive contracting.

 
HB HMIA 99-248
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.444        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO GOVERNMENT EFFICIENCY.



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


 1      SECTION 1.  Existing law generally requires every state
 
 2 agency to submit to the Department of Budget and Finance, for
 
 3 approval, a complete and detailed budget of proposed expenditures
 
 4 and estimated revenues.
 
 5      This bill would, instead, require that the proposed
 
 6 executive budgets for three expending agencies, commencing with
 
 7 fiscal year 1998 and continuing thereafter with three different
 
 8 agencies added annually, as specified to be by the Governor, be
 
 9 prepared in accordance with zero-base budgeting principles, as
 
10 specified, developed by the Director of Budget and Finance.
 
11      The bill would take effect immediately so as to include the
 
12 selected agencies in the 1998 Multi-Year Plan.
 
13      SECTION 2.  There is created a new section to be added to
 
14 the budget law that reads as follows:
 
15      "     Zero-base budgeting. (a)  Notwithstanding chapter 37,
 
16 Hawaii Revised Statutes, the proposed budgets of three different
 
17 state agencies each year, as selected by the Governor, shall be
 
18 prepared in accordance with zero-base budgeting principles, as
 
19 developed by the Director of the Department of Budget and
 

 
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 1 Finance.  Such principles, which shall be applied in the
 
 2 preparation of the proposed budgets, shall include, but need not
 
 3 be limited to, all of the following:  (1)  Identification and
 
 4 description of each program activity.
 
 5      (2)  Statement of objectives of each program activity and
 
 6 output.
 
 7      (3)  Evaluation and ranking of program activities on the
 
 8 basis of a benefit versus cost analysis, and allocation of
 
 9 resources to program activities accordingly.
 
10      (4)  Description and evaluation of qualitative and
 
11 quantitative effects or impact on funding the program activity at
 
12 a level of 50 percent, 75 percent, 100 percent, 125 percent, and
 
13 150 percent of the funding level commencing with fiscal year 1998
 
14 and continuing thereafter.
 
15      (5)  Estimation of effects of each such funding level on
 
16 proposed future expenditures and revenues, if any, estimated to
 
17 be generated by the program activity.
 

 
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 1      (6)  Identification of effects of each such funding level on
 
 2 personnel requirements.
 
 3      (b)  All information developed for zero-base budgeting
 
 4 pursuant to this section shall be made available to the
 
 5 Legislative Analyst, the Director of Budget and Finance, and the
 
 6 chairpersons of each fiscal committee of the Legislature."
 
 7      SECTION 3.  This Act is intended to incrementally include
 
 8 all state agencies into the zero-base budgeting program by
 
 9 including the proposed budgets of three different state agencies
 
10 annually commencing with fiscal year 1998.  This Act shall
 
11 therefore, take effect immediately.
 
12 
 
13        PART II. COMPETITIVE CONTRACTING AS A STATE POLICY.
 
14 
 
15      SECTION 4.  The Legislature finds that efficiency in
 
16 government is urgently needed.  State government has become
 
17 increasingly inefficient, expensive, wasteful, and unmanageable.
 
18 The protection of taxpayers requires that public services be
 
19 provided at the lowest possible cost consistent with service and
 
20 safety standards.
 
21      Competition in government is the answer.  Competition
 
22 improves performance and keeps costs down.  On the other hand,
 
23 monopolistic practices by government are characterized by higher
 

 
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 1 prices and limited production.  At a time when the economy is
 
 2 depressed, when jobs are scarce, when the cost to live in
 
 3 paradise is extraordinarily high, the public can no longer afford
 
 4 the high cost of inefficient and oversized government.  The time
 
 5 has come for the public to ask whether government is providing
 
 6 services that are and should more appropriately be provided by
 
 7 the private sector.
 
 8      The purpose of this bill is to amend the state plan to
 
 9 include as one of its objectives requiring the government to
 
10 develop a competitive market and environment for the provision of
 
11 public goods and services, to reduce the size of government and
 
12 improve its efficiency.  Private companies have been used 
 
13 effectively under competitive contracts to provide public
 
14 services at lower costs and with lower annual cost increases in
 
15 most states.
 
16      Competition in government will save the state money, reduce
 
17 the size of government, provide jobs to the public, expand the
 
18 current tax base, and provide better services to the public.
 
19      SECTION 5.  Section 226-6, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "226-6 Objectives and policies for the economy--in
 
22 general.(a)  Planning for the State's economy in general shall
 
23 be directed toward achievement of the following objectives:
 

 
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 1      (1)  Increased and diversified employment opportunities to
 
 2           achieve full employment, increased income and job
 
 3           choice, and improved living standards for Hawaii's
 
 4           people[.];
 
 5      (2)  A steadily growing and diversified economic base that
 
 6           is not overly dependent on a few industries, and
 
 7           includes the development and expansion of industries on
 
 8           the neighbor islands[.]; and
 
 9      (3)  Maintenance of an efficient government by fostering
 
10           competition in the provision of government goods and
 
11           services.
 
12      (b)  To achieve the general economic objectives, it shall be
 
13 the policy of this State to:
 
14      (1)  Expand Hawaii's national and international marketing,
 
15           communication, and organizational ties, to increase the
 
16           State's capacity to adjust to and capitalize upon
 
17           economic changes and opportunities occurring outside
 
18           the State[.];
 
19      (2)  Promote Hawaii as an attractive market for
 
20           environmentally and socially sound investment
 
21           activities that benefit Hawaii's people[.];
 
22      (3)  Seek broader outlets for new or expanded Hawaii
 
23           business investments[.];
 

 
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 1      (4)  Expand existing markets and penetrate new markets for
 
 2           Hawaii's products and services[.];
 
 3      (5)  Assure that the basic economic needs of Hawaii's people
 
 4           are maintained in the event of disruptions in overseas
 
 5           transportation[.];
 
 6      (6)  Strive to achieve a level of construction activity
 
 7           responsive to, and consistent with, state growth
 
 8           objectives[.];
 
 9      (7)  Encourage the formation of cooperatives and other
 
10           favorable marketing arrangements at the local or
 
11           regional level to assist Hawaii's small scale
 
12           producers, manufacturers, and distributors[.];
 
13      (8)  Encourage labor-intensive activities that are
 
14           economically satisfying and which offer opportunities
 
15           for upward mobility[.];
 
16      (9)  Foster greater cooperation and coordination between the
 
17           government and private sectors in developing Hawaii's
 
18           employment and economic growth opportunities[.;]
 
19     (10)  Stimulate the development and expansion of economic
 
20           activities which will benefit areas with substantial or
 
21           expected employment problems[.];
 
22     (11)  Maintain acceptable working conditions and standards
 
23           for Hawaii's workers[.];
 

 
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 1     (12)  Provide equal employment opportunities for all segments
 
 2           of Hawaii's population through affirmative action and
 
 3           nondiscrimination measures[.];
 
 4     (13)  Encourage businesses that have favorable financial
 
 5           multiplier effects within Hawaii's economy[.];
 
 6     (14)  Promote and protect intangible resources in Hawaii,
 
 7           such as scenic beauty and the aloha spirit, which are
 
 8           vital to a healthy economy[.];
 
 9     (15)  Increase effective communication between the
 
10           educational community and the private sector to develop
 
11           relevant curricula and training programs to meet future
 
12           employment needs in general, and requirements of new,
 
13           potential growth industries in particular[.];
 
14     (16)  Foster a business climate in Hawaii--including
 
15           attitudes, tax and regulatory policies, and financial
 
16           and technical assistance programs--that is conducive to
 
17           the expansion of existing enterprises and the creation
 
18           and attraction of new business and industry[.]; and
 
19     (17)  Foster a competitive climate in the provision of
 
20           government goods and services by prohibiting all state
 
21           agencies from engaging in any commercial activity,
 
22           including, but not limited to, the manufacturing,
 
23           processing, managing, sale, offering for sale, rental,
 

 
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 1           leasing, delivering, dispensing, distributing,
 
 2           constructing, designing, or advertising, in whole or
 
 3           part, of any goods or services to the public which are
 
 4           also offered by private enterprise if the private
 
 5           enterprise can provide goods or services on behalf of
 
 6           government agencies or to the public on a continuing
 
 7           basis more efficiently and at a lower cost than if such
 
 8           goods or services were maintained by government.  This
 
 9           requirement does not apply if the government agency is
 
10           specifically exempted by law, or the use of a private
 
11           enterprise source would cause unacceptable delay or
 
12           disruption of an essential program."
 
13      SECTION 6.  Section 226-103, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "226-103  Economic priority guidelines.(a)  Priority
 
16 guidelines to stimulate economic growth and encourage business
 
17 expansion and development to provide needed jobs for Hawaii's
 
18 people and achieve a stable and diversified economy:
 
19      (1)  Seek a variety of means to increase the availability of
 
20           investment capital for new and expanding enterprises.
 
21           (A)  Encourage investments which:
 
22                (i)  Reflect long term commitments to the State;
 
23               (ii)  Rely on economic linkages within the local
 

 
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 1                     economy;
 
 2              (iii)  Diversify the economy;
 
 3               (iv)  Reinvest in the local economy;
 
 4                (v)  Are sensitive to community needs and
 
 5                     priorities; and
 
 6               (vi)  Demonstrate a commitment to provide
 
 7                     management opportunities to Hawaii
 
 8                     residents[.];
 
 9      (2)  Encourage the expansion of technological research to
 
10           assist industry development and support the development
 
11           and commercialization of technological advancements[.];
 
12      (3)  Improve the quality, accessibility, and range of
 
13           services provided by government to business, including
 
14           data and reference services and assistance in complying
 
15           with governmental regulations[.];
 
16      (4)  Seek to ensure that state business tax and labor laws
 
17           and administrative policies are equitable, rational,
 
18           and predictable[.];
 
19      (5)  Streamline the building and development permit and
 
20           review process, and eliminate or consolidate other
 
21           burdensome or duplicative governmental requirements
 
22           imposed on business, where public health, safety and
 
23           welfare would not be adversely affected[.];
 

 
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 1      (6)  Encourage the formation of cooperatives and other
 
 2           favorable marketing or distribution arrangements at the
 
 3           regional or local level to assist Hawaii's small-scale
 
 4           producers, manufacturers, and distributors[.];
 
 5      (7)  Continue to seek legislation to protect Hawaii from
 
 6           transportation interruptions between Hawaii and the
 
 7           continental United States[.];
 
 8      (8)  Provide public incentives and encourage private
 
 9           initiative to develop and attract industries which
 
10           promise long-term growth potentials and which have the
 
11           following characteristics:
 
12           (A)  An industry that can take advantage of Hawaii's
 
13                unique location and available physical and human
 
14                resources[.];
 
15           (B)  A clean industry that would have minimal adverse
 
16                effects on Hawaii's environment[.];
 
17           (C)  An industry that is willing to hire and train
 
18                Hawaii's people to meet the industry's labor needs
 
19                at all levels of employment[.];
 
20           (D)  An industry that would provide reasonable income
 
21                and steady employment[.];
 
22      (9)  Support and encourage, through educational and
 
23           technical assistance programs and other means, expanded
 

 
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 1           opportunities for employee ownership and participation
 
 2           in Hawaii business[.];
 
 3     (10)  Enhance the quality of Hawaii's labor force and develop
 
 4           and maintain career opportunities for Hawaii's people
 
 5           through the following actions:
 
 6           (A)  Expand vocational training in diversified
 
 7                agriculture, aquaculture, information industry,
 
 8                and other areas where growth is desired and
 
 9                feasible[.];
 
10           (B)  Encourage more effective career counseling and
 
11                guidance in high schools and post-secondary
 
12                institutions to inform students of present and
 
13                future career opportunities[.];
 
14           (C)  Allocate educational resources to career areas
 
15                where high employment is expected and where growth
 
16                of new industries is desired[.];
 
17           (D)  Promote career opportunities in all industries for
 
18                Hawaii's people by encouraging firms doing
 
19                business in the State to hire residents[.];
 
20           (E)  Promote greater public and private sector
 
21                cooperation in determining industrial training
 
22                needs and in developing relevant curricula and on-
 
23                the-job training opportunities[.];
 
24           (F)  Provide retraining programs and other support
 

 
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 1                services to assist entry of displaced workers into
 
 2                alternative employment[.];
 
 3      (b)  Priority guidelines to promote the economic health and
 
 4 quality of the visitor industry:
 
 5      (1)  Promote visitor satisfaction by fostering an
 
 6           environment which enhances the Aloha Spirit and
 
 7           minimizes inconveniences to Hawaii's residents and
 
 8           visitors[.];
 
 9      (2)  Encourage the development and maintenance of well-
 
10           designed, adequately serviced hotels and resort
 
11           destination areas which are sensitive to neighboring
 
12           communities and activities and which provide for
 
13           adequate shoreline setbacks and beach access[.];
 
14      (3)  Support appropriate capital improvements to enhance the
 
15           quality of existing resort destination areas and
 
16           provide incentives to encourage investment in
 
17           upgrading, repair, and maintenance of visitor
 
18           facilities[.];
 
19      (4)  Encourage visitor industry practices and activities
 
20           which respect, preserve, and enhance Hawaii's
 
21           significant natural, scenic, historic, and cultural
 
22           resources[.];
 
23      (5)  Develop and maintain career opportunities in the
 

 
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 1           visitor industry for Hawaii's people, with emphasis on
 
 2           managerial positions[.];
 
 3      (6)  Support and coordinate tourism promotion abroad to
 
 4           enhance Hawaii's share of existing and potential
 
 5           visitor markets[.];
 
 6      (7)  Maintain and encourage a more favorable resort
 
 7           investment climate consistent with the objectives of
 
 8           this chapter[.];
 
 9      (8)  Support law enforcement activities that provide a safer
 
10           environment for both visitors and residents alike[.];
 
11      (9)  Coordinate visitor industry activities and promotions
 
12           to business visitors through the state network of
 
13           advanced data communication techniques[.];
 
14      (c)  Priority guidelines to promote the continued viability
 
15 of the sugar and pineapple industries:
 
16      (1)  Provide adequate agricultural lands to support the
 
17           economic viability of the sugar and pineapple
 
18           industries[.];
 
19      (2)  Continue efforts to maintain federal support to provide
 
20           stable sugar prices high enough to allow profitable
 
21           operations in Hawaii[.];
 
22      (3)  Support research and development, as appropriate, to
 
23           improve the quality and production of sugar and
 

 
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 1           pineapple crops[.];
 
 2      (d)  Priority guidelines to promote the growth and
 
 3 development of diversified agriculture and aquaculture:
 
 4      (1)  Identify, conserve, and protect agricultural and
 
 5           aquacultural lands of importance and initiate
 
 6           affirmative and comprehensive programs to promote
 
 7           economically productive agricultural and aquacultural
 
 8           uses of such lands[.];
 
 9      (2)  Assist in providing adequate, reasonably priced water
 
10           for agricultural activities[.];
 
11      (3)  Encourage public and private investment to increase
 
12           water supply and to improve transmission, storage, and
 
13           irrigation facilities in support of diversified
 
14           agriculture and aquaculture[.];
 
15      (4)  Assist in the formation and operation of production and
 
16           marketing associations and cooperatives to reduce
 
17           production and marketing costs[.];
 
18      (5)  Encourage and assist with the development of a
 
19           waterborne and airborne freight and cargo system
 
20           capable of meeting the needs of Hawaii's agricultural
 
21           community[.];
 
22      (6)  Seek favorable freight rates for Hawaii's agricultural
 
23           products from interisland and overseas transportation
 

 
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 1           operators[.];
 
 2      (7)  Encourage the development and expansion of agricultural
 
 3           and aquacultural activities which offer long-term
 
 4           economic growth potential and employment
 
 5           opportunities[.];
 
 6      (8)  Continue the development of agricultural parks and
 
 7           other programs to assist small independent farmers in
 
 8           securing agricultural lands and loans[.];
 
 9      (9)  Require agricultural uses in agricultural subdivisions
 
10           and closely monitor the uses in these subdivisions.
 
11     (10)  Support the continuation of land currently in use for
 
12           diversified agriculture[.];
 
13      (e)  Priority guidelines for water use and development:
 
14      (1)  Maintain and improve water conservation programs to
 
15           reduce the overall water consumption rate[.];
 
16      (2)  Encourage the improvement of irrigation technology and
 
17           promote the use of nonpotable water for agricultural
 
18           and landscaping purposes[.];
 
19      (3)  Increase the support for research and development of
 
20           economically feasible alternative water sources[.];
 
21      (4)  Explore alternative funding sources and approaches to
 
22           support future water development programs and water
 
23           system improvements[.];
 

 
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 1      (f)  Priority guidelines for energy use and development:
 
 2      (1)  Encourage the development, demonstration, and
 
 3           commercialization of renewable energy sources.[];
 
 4      (2)  Initiate, maintain, and improve energy conservation
 
 5           programs aimed at reducing energy waste and increasing
 
 6           public awareness of the need to conserve energy[.];
 
 7      (3)  Provide incentives to encourage the use of energy
 
 8           conserving technology in residential, industrial, and
 
 9           other buildings[.];
 
10      (4)  Encourage the development and use of energy conserving
 
11           and cost-efficient transportation systems[.];
 
12      (g)  Priority guidelines to promote the development of the
 
13 information industry: 
 
14      (1)  Establish an information network that will serve as the
 
15           catalyst for establishing a viable information industry
 
16           in Hawaii[.];
 
17      (2)  Encourage the development of services such as financial
 
18           data processing, a products and services exchange,
 
19           foreign language translations, telemarketing,
 
20           teleconferencing, a twenty-four-hour international
 
21           stock exchange, international banking, and a Pacific
 
22           Rim management center[.];
 
23      (3)  Encourage the development of small businesses in the
 

 
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 1           information field such as software development, the
 
 2           development of new information systems and peripherals,
 
 3           data conversion and data entry services, and home or
 
 4           cottage services such as computer programming,
 
 5           secretarial, and accounting services[.];
 
 6      (4)  Encourage the development or expansion of educational
 
 7           and training opportunities for residents in the
 
 8           information and telecommunications fields[.];
 
 9      (5)  Encourage research activities, including legal research
 
10           in the information and telecommunications fields[.];
 
11      (6)  Support promotional activities to market Hawaii's
 
12           information industry services[.];
 
13      (h)  Adopt priority guidelines to maintain an efficient
 
14           government and foster a competitive climate in the
 
15           provision of government goods and services:
 
16      (1)  Prohibit all state agencies from engaging in any
 
17           commercial activity, including, but not limited to, the
 
18           manufacturing, processing, managing, sale, offering for
 
19           sale, rental, leasing, delivering, dispensing,
 
20           distributing, constructing, designing, or advertising,
 
21           in whole or part, of any goods or services to the
 
22           public which are also offered by private enterprise if
 
23           the private enterprise can provide goods or services on
 

 
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 1           behalf of government agencies or to the public on a
 
 2           continuing basis more efficiently and at a lower cost
 
 3           than if such goods or services were maintained by the
 
 4           government agency.  This requirement shall not apply if
 
 5           the agency is specifically exempted by law, or the use
 
 6           of a private enterprise source would cause unacceptable
 
 7           delay or disruption of an essential program."
 
 8 
 
 9               PART III. COMPETITIVE PUBLICATION OF
 
10                      HAWAII REVISED STATUTES
 
11 
 
12      SECTION 7. The purpose of this Part is to require the
 
13 privatization of the publication of the Hawaii Revised Statutes
 
14 and the Hawaii Session Laws. The participation of the private
 
15 sector in the publication of these books and documents is a
 
16 concept whose time has come. 
 
17      Competitive contracting will provide the service of making
 
18 available the Hawaii Revised Statutes and the Hawaii Session Laws
 
19 at a cost significantly less than the state presently spends.
 
20      The legislature further finds that competitive contracting
 
21 of the publication of these books and documents will save the
 
22 state money, reduce the size of government, provide jobs to the
 
23 public, expand the current tax base, and provide better service
 

 
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 1 to public.
 
 2      SECTION 8.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
 3 is amended by adding a new section to be appropriately designated
 
 4 and to read as follows:
 
 5      "23G-  Definitions.  The following terms, whenever used or
 
 6 referred to in this part, shall have the following meanings,
 
 7 unless the context clearly requires a different meaning:
 
 8      "Attributable fully allocated cost" means the operating and
 
 9 capital cost of a public service including direct, indirect and
 
10 allocated costs minus the cost of any function not to be
 
11 competitively contracted.
 
12      "Contract analysis" means a periodic analysis in which the
 
13 costs of the production of a good or service by the vendor
 
14 currently producing such good or service are compared to the
 
15 costs of production by other vendors.  The process assumes the
 
16 comparison of the true costs by each vendor that result in
 
17 comparable public goods or services.
 
18      "Government entity" means any of the following:  the state,
 
19 a local government, a special district or any other public body
 
20 authorized or established under the laws or authority of the
 
21 state (such as counties, cities, towns, townships, villages,
 
22 special districts, government enterprises, publicly owned
 
23 utilities, etc.).
 

 
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 1      "Public goods and services" means any product or service
 
 2 produced by a covered government entity under its public
 
 3 authority and any product or service supportive of or ancillary
 
 4 to the functions of the government entity."
 
 5      SECTION 9.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
 6 is amended by adding a new section to be appropriately designated
 
 7 and to read as follows:
 
 8      "23G-     Competitive contracting of the Hawaii Revised
 
 9 Statutes and the Hawaii Session Laws.  (a)  On an annual basis,
 
10 the Legislative Reference Bureau shall perform a contract
 
11 analysis covering publication of the Hawaii Revised Statutes
 
12 (hereinafter HRS) and the Hawaii Session Laws (hereinafter
 
13 Session Laws) for which it has received a qualifying petition of
 
14 interest from a private company pursuant to section      .  No
 
15 more than one contract analysis shall be required for the HRS and
 
16 the Session Laws within a one-year period.
 
17      (b)  The LRB shall retain full control of service
 
18 quantities, service specifications, standards and any other
 
19 matter demonstrably related to the delivery of the HRS and
 
20 Session Laws in a manner consistent with the public interest.
 
21      (c)  The LRB shall fully comply with this section as soon as
 
22 practicable, but shall in any case be in full compliance with its
 
23 provisions within one year of enactment."
 

 
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 1      SECTION 10.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
 2 is amended by adding a new section to be appropriately designated
 
 3 and to read as follows:
 
 4      "23G-      Free enterprise participation process.  (a) The
 
 5 LRB shall establish a free enterprise participation process,
 
 6 including:
 
 7           (1) Maintenance of a list of interested proposers,
 
 8           which shall include all organizations that have
 
 9           requested inclusion on such list.  The division shall
 
10           advertise for additions to such list at least annually.
 
11           (2) Distribution to companies on the mailing list of
 
12           notices specifying dates and deadlines with respect to
 
13           the routine contract analysis, annual deadlines for
 
14           submittal of petitions of interest from private
 
15           companies.
 
16           (3) Division or department appeal process covering
 
17           petitions of interest and requests for proposals.
 
18      (b)  The free enterprise participation process shall seek
 
19 the widest possible participation of interested private companies
 
20 in the publication of the HRS and Session Laws."
 
21      SECTION 11.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
22 is amended by adding a new section to be appropriately designated
 
23 and to read as follows:
 

 
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 1      "23G-      Petitions of interest.  (a)  Private companies
 
 2 interested in providing goods or services for the publication of
 
 3 the HRS and Session Laws may file petitions of interest subject
 
 4 to the free enterprise participation process of the LRB.
 
 5      (b)  Petitions of interest shall include:
 
 6           (1)  A description of the public good or service that
 
 7           the private company would like to provide for the
 
 8           publication of the HRS and Session Laws;
 
 9           (2)  A statement that the private company believes that
 
10           it can provide the same service, under contract to the
 
11           LRB, for a lower cost than the present cost;
 
12           (3)  A description of the private company's financial
 
13           capacity to provide the service;
 
14           (4)  A description of the private company's technical
 
15           ability to provide the public good or service,
 
16           especially evidenced by identical, similar, or relevant
 
17           goods or services provided by the company, whether
 
18           under public sponsorship or not.
 
19      (c)  Within 90 days the LRB shall determine whether there is
 
20 sufficient reason to believe that the private company has the
 
21 financial and technical ability to provide the public good or
 
22 service.
 
23      (d)  The LRB shall make one of two findings with respect to
 

 
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 1 the petition of interest:
 
 2           (1)  Certification of petition:  that the private
 
 3           company has sufficient financial and technical ability
 
 4           to provide the good or service;
 
 5           (2)  Denial of petition:  that the private company has
 
 6           insufficient financial and/or technical ability to
 
 7           provide the good or service.  The LRB shall state its
 
 8           justification for such a finding.
 
 9 However, if the LRB has scheduled an immediate contract analysis
 
10 for substantially the same public good or service specified in
 
11 the petition of interest, it shall notify the petitioner that
 
12 such an analysis has been scheduled, without making a finding on
 
13 the petition.
 
14      (e)  If the LRB certifies the petition, it shall undertake a
 
15 contract analysis with respect to the public good or service
 
16 specified in the petition, at the first possible opportunity
 
17 within its schedule adopted under its free enterprise
 
18 participation process."
 
19 
 
20      SECTION 12.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
21 is amended by adding a new section to be appropriately designated
 
22 and to read as follows:
 
23      "23G-      Contract analysis and public goods or services
 

 
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 1 contracts.  (a)  Request for proposals ("RFP") requirement:  The
 
 2 contract analysis shall be performed through the issuance and
 
 3 evaluation of requests for proposals from private companies.
 
 4      (b)  (1)  Request for proposal process:  The LRB shall seek
 
 5           the widest reasonable distribution of each request for
 
 6           proposals, and at a minimum shall send each request for
 
 7           proposals to each organization on the interested
 
 8           proposers list and to each additional organization that
 
 9           requests the specific request for proposal.  
 
10           (2)  The LRB shall advertise each request for proposals
 
11           within 10 days of issuance, and in accordance with its
 
12           general procurement policy.
 
13           (3)  Proposals submission shall be required no sooner
 
14           than 45 days after the RFP advertisement date.
 
15           (4)  A request for proposals shall clearly specify the
 
16           goods or services to be procured and include a draft
 
17           contract.
 
18      (c)  Evaluation of proposals:  The LRB shall award the
 
19 contract to the private company whose proposal is responsive,
 
20 responsible and offers the lowest cost.
 
21      (d)  Limitation on contract length:  Any public good or
 
22 service operated under competitive proposals on the effective
 
23 date of this section or thereafter shall be subject to a new
 

 
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 1 competitive proposal at least every five years.  Renewal options
 
 2 that extend a contract beyond five years shall be prohibited.
 
 3      (e)  No reversion to non-competitive operation:  In no case
 
 4 shall a good or service operated under competitive proposal be
 
 5 returned to operation not subject to competitive proposal.
 
 6      (f)  No labor restrictions:  The LRB shall not establish or
 
 7 impose any requirement relating to salaries, wages, benefits, or
 
 8 labor union representation, staffing levels, work rules, or other
 
 9 conditions of employment of private company employees.  All
 
10 contractors shall comply with applicable federal and state labor
 
11 laws.
 
12      (g)  Competitive determination of contract prices required:
 
13 All contract prices shall be competitively determined through a
 
14 request for proposal.  No change in contract payment amount to a
 
15 private contractor shall be made except as specified in the
 
16 contract.  Payment changes in a contract shall be limited to
 
17 indices, escalators, deflators, changes in service level, and
 
18 other expressly stated or calculable amounts, consistent with the
 
19 request for proposal and the proposal of the private contractor
 
20 awarded the contract.
 
21      (h)  Interim contracts:  The LRB may execute interim standby
 
22 competitive contracts with one or more private contractors to
 
23 provide any good or service on an interim basis in the event that
 

 
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 1 the LRB is required to do so by the public welfare.  Any good or
 
 2 service operated under a standby contract shall be subject to
 
 3 competitive proposal within six months of the standby contract
 
 4 service award.
 
 5      (i)  No restrictive agreements:  The LRB shall not make or
 
 6 be bound by any contract, agreement, or assurance that restricts
 
 7 its ability to comply with this chapter in any respect."
 
 8      SECTION 13.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
 9 is amended by adding a new section to be appropriately designated
 
10 and to read as follows:
 
11      "23G-       Liability and sovereign immunity.  (a)  The
 
12 contractor shall assume all liability arising under a contract
 
13 entered into pursuant to this chapter.
 
14      (b)  The sovereign immunity of the state shall not extend to
 
15 the contractor.  Neither the contractor nor the insurer of the
 
16 contractor may plead the defense of sovereign immunity in any
 
17 action arising out of the performance of the contract."
 
18      SECTION 14.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
19 is amended by adding a new section to be appropriately designated
 
20 and to read as follows:
 
21      "23G-       Termination of a contract.  (a)  The LRB may,
 
22 upon demonstration that a breach of contract has occurred and
 
23 that after the passage of a reasonable period of time the breach
 

 
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 1 has not been cured, without penalty to the LRB, cancel a contract
 
 2 for the provision of goods or services at any time upon giving a
 
 3 six-month written notice."
 
 4      SECTION 15.  Chapter 23G, Part II, Hawaii Revised Statutes,
 
 5 is amended by adding a new section to be appropriately designated
 
 6 and to read as follows:
 
 7      "23G-       Rulemaking authority.  The LRB shall promulgate
 
 8 reasonable rules and regulations necessary to carry out this
 
 9 Act."
 
10      SECTION 16.  Section 23G-3, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "23G-3 General purposes of bureau.  The purpose of the
 
13 office of the legislative reference bureau shall be:
 
14      (1)  To provide a comprehensive research and reference
 
15           service on legislative problems for the legislature;
 
16      (2)  To conduct impartial research, including legal
 
17           research, as may be necessary for the enactment of
 
18           substantive legislation, upon request by the
 
19           legislature, legislative committees, or legislators, or
 
20           on its own initiative;
 
21      (3)  To disseminate its research findings to the legislature
 
22           on all research projects undertaken upon the request of
 
23           the legislature or legislative committees;
 

 
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 1      (4)  To secure reports of various officers and boards of the
 
 2           State and as far as may be of the states and of the
 
 3           other territories of the United States and such other
 
 4           material, periodicals, or books as will furnish the
 
 5           fullest information practicable upon all matters
 
 6           pertaining to current or proposed legislative problems;
 
 7      (5)  To secure information for the legislature, legislative
 
 8           committees, and legislators by cooperating with the
 
 9           legislative reference services in the states and with
 
10           the legislative service conference maintained by the
 
11           council of state governments;
 
12      (6)  To maintain a reference library for use by the
 
13           legislature and legislative service agencies.  Subject
 
14           to the priorities established by the director,
 
15           reference materials may be made available to the
 
16           various departments and agencies of the State and the
 
17           general public;
 
18      (7)  To draft or aid in drafting bills, resolutions,
 
19           memorials, and amendments thereto, including committee
 
20           reports, for the legislature, legislative committees,
 
21           and legislators when requested;
 
22      (8)  To control and maintain the operations of any
 
23           legislative data processing program as may be
 

 
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 1           established;
 
 2      (9)  To serve, upon request, in an advisory capacity to the
 
 3           legislature and its committees on all matters within
 
 4           its competencies and responsibilities;
 
 5     (10)  To assist, upon request, legislative service agencies
 
 6           on matters within its competency; and
 
 7     (11)  To perform the function of statute revision and
 
 8           oversight of the publication of session laws,
 
 9           supplements, and replacement volumes."
 
10      SECTION 17.  Section 23G-12, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "23G-12  Duties.  In performing the function of statute
 
13 revision and the oversight of the publication of session laws,
 
14 and supplements, and replacement volumes, the duties of the
 
15 revisor of statutes, in the order of priority shall be:
 
16      (1)  The oversight of the publication of the session laws;
 
17      (2)  The oversight of the publication of supplements to the
 
18           revised statutes;
 
19      (3)  The oversight of the publication of replacement volumes
 
20           of the revised statutes;
 
21      (4)  The review of annotations to the revised statutes;
 
22      (5)  The continuous revision of the statutes of Hawaii;
 
23      (6)  The publication of the Hawaii administrative rules
 

 
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 1           index and supplements thereto; and
 
 2      (7)  The preparation of rules of format to be followed by
 
 3           all state agencies in the compilation and publication
 
 4           of their rules and the distribution of copies of the
 
 5           format rules to all state agencies."
 
 6      SECTION 18.  Section 93-2, Hawaii Revised Statutes, is
 
 7 amended by amending the definition of "publication" to read as
 
 8 follows:
 
 9      "Publication" includes any document, compilation, journal,
 
10 report, statute, regulation, ordinance issued in print by any
 
11 state or county agency, and confidential publications which shall
 
12 be deposited in accordance with security regulations to be
 
13 determined by the issuing agency. This shall include the Hawaii
 
14 Revised Statutes, and the Hawaii Session Laws which are published
 
15 under private contract pursuant to section 23G-  ."
 
16      SECTION 19.  Section 23G-17, Hawaii Revised Statutes, is
 
17 repealed.
 
18      ["23G-17  Printing; contracts.  The office of the
 
19 legislative reference bureau shall cause sufficient copies of the
 
20 session laws, supplements, and replacement volumes to be printed.
 
21 The bureau may contract for the publications with or without
 
22 regard to the laws governing public contracts or public printing.
 
23 The completed volumes of the session laws, supplements, and
 

 
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 1 replacement volumes shall be delivered to the lieutenant governor
 
 2 for distribution."]
 
 3      SECTION 20.  Section 23G-18, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      ["23G-18  Sale and distribution.  The session laws,
 
 6 supplements, and replacement volumes shall be sold and
 
 7 distributed by the lieutenant governor at a price fixed by the
 
 8 lieutenant governor.  The money received therefor shall be paid
 
 9 into the state treasury to the credit of the general fund.  The
 
10 lieutenant governor may furnish the session laws, supplements,
 
11 and replacement volumes to public officials for official use free
 
12 of charge.  As used in this chapter, public officials include
 
13 officials of the state and county governments, of the
 
14 congressional delegation of the State, of the United States
 
15 District Court, District of Hawaii, and of the United States
 
16 Attorney's Office in Hawaii."]
 
17      SECTION 21. Statutory material to be repealed is bracketed.
 
18 New statutory material is underscored.
 
19      SECTION 22. This Act shall take effect upon its approval.
 
20 
 
21 
 
22                         INTRODUCED BY:___________________________
 

 
HB HMIA 99-248