REPORT TITLE:
Procurement

DESCRIPTION:
Amends various provisions of the Hawaii public procurement code
to consolidate and clarify sections in the chapter.  Amends or
repeals related sections of the HRS to bring them into compliance
with the code. (HB985 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        985
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PROCUREMENT.



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

 1      SECTION 1.  Chapter 103, Hawaii Revised Statutes, is amended
 
 2 by adding to part I two new sections to be appropriately
 
 3 designated and to read as follows:
 
 4      "103-    Definitions.  The definitions of chapter 103D
 
 5 shall apply to this chapter unless the context clearly requires
 
 6 otherwise.
 
 7      103-    Application of this chapter.  (a)  This chapter
 
 8 shall apply to all governmental bodies unless specifically
 
 9 exempted.
 
10      (b)  The comptroller shall adopt rules pursuant to chapter
 
11 91 necessary for the purposes of this chapter."
 
12      SECTION 2.  Chapter 103D, Hawaii Revised Statutes, is
 
13 amended by adding to part IV four new sections to be
 
14 appropriately designated and to read as follows:
 
15      "103D-    Indigenous and Polynesian introduced plants; use
 
16 in public landscaping.  (a)  Wherever and whenever feasible, all
 
17 plans, designs, and specifications for new or renovated
 
18 landscaping of any building, complex of buildings, facility,
 
19 complex of facilities, or housing developed by the State with
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 public moneys shall incorporate indigenous land plant species as
 
 2 defined in section 195D-2, and plant species brought to Hawaii by
 
 3 Polynesians before European contact, such as the kukui, noni, and
 
 4 coconut; provided that:
 
 5      (1)  Suitable cultivated plants can be made available for
 
 6           this purpose without jeopardizing wild plants in their
 
 7           natural habitat; and
 
 8      (2)  Wherever and whenever possible, indigenous plants shall
 
 9           be used for landscaping on the island or islands on
 
10           which the species originated.
 
11      (b)  Each plant or group of plants used pursuant to
 
12 subsection (a) shall be clearly identified with signs for the
 
13 edification of the general public.
 
14      (c)  The policy board shall adopt rules pursuant to chapter
 
15 91 necessary for the purposes of this section.
 
16      103D-    Provisions for pollution control.  All public
 
17 contracts awarded pursuant to this chapter shall make provisions
 
18 for control of pollution when encountered in the performance of
 
19 the contract.
 
20      103D-    Energy efficiency through life-cycle costing. (a)
 
21 The procurement practices of the State and its counties shall
 
22 include energy efficient standards and policies, including life-
 
23 cycle costing.
 

 
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 1      (b)  In implementing life-cycle costing, the purchasing
 
 2 agency shall be guided by energy efficiency standards and
 
 3 policies for purchasing various items developed and promulgated
 
 4 by the United States Department of Energy and other federal
 
 5 agencies, and by nationally recognized trade associations,
 
 6 including but not limited to the National Association of State
 
 7 Purchasing Officials, the National Institute of Governmental
 
 8 Purchasing, Inc., the National Association of Purchasing
 
 9 Management, and the Air Conditioning and Refrigeration Institute.
 
10 The purchasing agency shall notify bidders of information,
 
11 procedures, and forms required in implementing energy efficiency
 
12 standards and policies.  The information required shall include
 
13 purchasing standards and policies developed by federal agencies
 
14 and by nationally recognized agencies and associations, as well
 
15 as energy consumption and life-cycle cost data.
 
16      (c)  The purchasing agency shall consider purchasing via the
 
17 life-cycle costing method those classes of items for which
 
18 nationally recognized energy efficiency data have been developed.
 
19 These items shall include but not be limited to automobiles and
 
20 air conditioning systems.  The watt-saving variety of common-
 
21 sized fluorescent lamps shall be purchased except where standard
 
22 wattage of such lamps is specifically required by the using
 
23 agency.
 

 
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 1      103D-    Value engineering clauses.  The State and each of
 
 2 the respective counties shall insert clauses providing for value
 
 3 engineering incentives in all public works contracts for amounts
 
 4 in excess of $250,000.  The clauses shall provide:
 
 5      (1)  That cost reduction proposals submitted by contractors:
 
 6           (A)  Must require, in order to be applied to the
 
 7                contract, a change order thereto; and
 
 8           (B)  Must result in savings to the State or county, as
 
 9                the case may be, by providing less costly items
 
10                than those specified in the contract without
 
11                impairing any of their essential functions and
 
12                characteristics such as service life, reliability,
 
13                substitutability, economy of operation, ease of
 
14                maintenance, and necessary standardized features;
 
15           and
 
16      (2)  That accepted cost reduction proposals shall result in
 
17           an equitable adjustment of the contract price so that
 
18           the contractor will share a portion of the realized
 
19           cost reduction."
 
20      SECTION 3.  Chapter 103D, Hawaii Revised Statutes, is
 
21 amended by adding to part X four new sections to be appropriately
 
22 designated and to read as follows:
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      "103D-    Taxpayer preference.  For evaluation purposes,
 
 2 the bidder's tax-exempt price shall be increased by the
 
 3 applicable retail rate of general excise tax and the applicable
 
 4 use tax.  For competitive sealed bids, the lowest responsive,
 
 5 responsible bidder, taking into consideration the above increase,
 
 6 shall be awarded the contract, but the contract amount of any
 
 7 contract awarded shall be the amount of the price offered and
 
 8 shall not include the amount of the increase.
 
 9      103D-    Preference for qualified community rehabilitation
 
10 programs.  When a governmental agency contracts for purchases of
 
11 services, a five per cent preference shall be given to services
 
12 to be provided by nonprofit corporations or public agencies
 
13 operating qualified community rehabilitation programs in
 
14 conformance with criteria established by the department of labor
 
15 and industrial relations pursuant to chapter 91; provided that
 
16 contracts awarded under this section shall be exempt from the
 
17 wages provision of section 103-55.  The policy board shall adopt
 
18 rules under chapter 91 to establish the preference for nonprofit
 
19 corporations or public agencies operating qualified community
 
20 rehabilitation programs consistent with this section.
 
21      103D-    Purchases from qualified community rehabilitation
 
22 programs.  (a)  Any public agency, without advertising or calling
 
23 for bids, may purchase goods or services provided by qualified
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 community rehabilitation programs serving persons with
 
 2 disabilities that have indicated an interest in supplying the
 
 3 goods or services and on an equitable basis may apportion the
 
 4 business among the interested programs; provided that the goods
 
 5 and services meet the specifications and needs of the purchasing
 
 6 agency and are purchased at a fair market price as determined by
 
 7 the appropriate public agency; and provided further that the
 
 8 programs comply with the following:
 
 9      (1)  Meet all of the requirements of a qualified community
 
10           rehabilitation program under section 103D-1001; and
 
11      (2)  Maintain a disabled to nondisabled employee ratio equal
 
12           to or in excess of three-to-one for work hours of
 
13           direct labor at all times on the work contracted.
 
14      (b)  The purchasing agency shall:
 
15      (1)  Receive and review proposals submitted by qualified
 
16           community rehabilitation programs to provide goods or
 
17           services and determine if they are suitable for
 
18           purchase by the agency;
 
19      (2)  Negotiate the conditions and terms for the purchase,
 
20           including the price of the offer, between the agency
 
21           and the qualified community rehabilitation program;
 
22           provided that the price of the offer shall not exceed
 
23           the fair market price and there is assurance that the
 

 
Page 7                                                     985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           qualified community rehabilitation program proposal is
 
 2           in compliance with all administrative rules related to
 
 3           purchasing; and
 
 4      (3)  Ensure that any goods or services purchased from a
 
 5           qualified community rehabilitation program shall not be
 
 6           placed on the Hawaii products list under section 103D-
 
 7           1002.
 
 8      103D-    Qualified community rehabilitation program;
 
 9 proposal to provide goods or services.  A qualified community
 
10 rehabilitation program interested in selling goods or services to
 
11 a public agency shall submit a proposal to the agency containing
 
12 the following information:
 
13      (1)  A description of the goods or service;
 
14      (2)  The price of the goods or service; and
 
15      (3)  Documents and information necessary to qualify as a
 
16           qualified community rehabilitation program under
 
17           section 103D-1001."
 
18      SECTION 4.  Section 103D-1001, Hawaii Revised Statutes, is
 
19 amended by adding five new definitions to be appropriately
 
20 inserted and to read as follows:
 
21      ""Direct labor" means all work required for preparation,
 
22 processing, or packing of goods or performance of services, but
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 not work relating to supervision, administration, inspection, or
 
 2 shipping.
 
 3      "Fair market price" means the price of a product or service
 
 4 paid by a willing buyer to a willing seller, that is reasonably
 
 5 comparable to prices on the open market.
 
 6      "Person with disabilities" means any person who is so
 
 7 severely incapacitated by any physical or mental disability that
 
 8 the person cannot engage in normal competitive employment because
 
 9 of the disability.
 
10      "Public agency" means any agency of the State or county.
 
11      "Qualified community rehabilitation program" means a
 
12 nonprofit community rehabilitation program for persons with
 
13 disabilities that:
 
14      (1)  Is organized and incorporated under the laws of the
 
15           United States or this State, and located in this State;
 
16      (2)  Is operated in the interest of and employs persons with
 
17           disabilities;
 
18      (3)  Does not inure any part of its net income to any
 
19           shareholder or other individual;
 
20      (4)  Complies with all applicable occupational health and
 
21           safety standards required by the federal, state, and
 
22           county governments; and
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (5)  Holds a current certificate from the United States
 
 2           Department of Labor pursuant to the Fair Labor
 
 3           Standards Act, Title 29 United States Code section
 
 4           214(c), and is certified by the state department of
 
 5           labor and industrial relations under section 387-9 and
 
 6           applicable administrative rules relating to the
 
 7           employment of persons with disabilities."
 
 8      SECTION 5.  Section 76-55, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "76-55  Membership of civil service.  All regular employees
 
11 and all other employees having a permanent appointment in civil
 
12 service pursuant to law shall constitute the membership of the
 
13 civil service, but no employee shall be entitled to membership in
 
14 civil service unless the employee has been appointed in
 
15 accordance with law and has satisfied all requirements for
 
16 employment, including those prescribed by [sections 78-1 and
 
17 103-57.] section 78-1."
 
18      SECTION 6.  Chapter 103, Hawaii Revised Statutes, is amended
 
19 by amending the title to read as follows:
 
20                           "CHAPTER 103
 
21        EXPENDITURE OF PUBLIC MONEY [AND PUBLIC CONTRACTS]"
 
22      SECTION 7.  Section 103-32.1, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
Page 10                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      "103-32.1  Contract provision for retainage.  Any public
 
 2 contract [issued under this chapter] may include a provision for
 
 3 the retainage of a portion of the amount due under the contract
 
 4 to the contractor to insure the proper performance of the
 
 5 contract; provided that [the]:
 
 6      (1)  The sum withheld by the [contracting] procurement
 
 7           officer from the contractor shall not exceed five per
 
 8           cent of the amount due the contractor and that after
 
 9           fifty per cent of the contract is completed and
 
10           progress is satisfactory, no additional sum shall be
 
11           withheld; [provided further that if]
 
12      (2)  If progress is not satisfactory, the [contracting]
 
13           procurement officer may continue to withhold as
 
14           retainage, sums not exceeding five per cent of the
 
15           amount due the contractor[.]; and
 
16      (3)  The retainage shall not include sums deducted as
 
17           liquidated damages from moneys due or that may become
 
18           due the contractor under the contract."
 
19      SECTION 8.  Section 103-32.2, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "[[]103-32.2[]]  Substitution of retainage.  Any other law
 
22 to the contrary notwithstanding, any public contract [issued
 
23 under this chapter] may provide that the [contracting]
 

 
Page 11                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 procurement officer may enter into an agreement with the
 
 2 contractor which will allow the contractor to withdraw from time
 
 3 to time the whole or any portion of the sum retained under
 
 4 section 103-21.1 upon depositing with the [contracting]
 
 5 procurement officer any general obligation bond of the State or
 
 6 its political subdivisions with a market value not less than the
 
 7 sum to be withdrawn; provided that the [contracting] procurement
 
 8 officer may require that the total market value of such bond be
 
 9 greater than the sum to be withdrawn."
 
10      SECTION 9.  Section 103-39.5, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "[[]103-39.5[]]  Construction, renovation, or repair of
 
13 school facilities; county permit exemption.  Any [contracts under
 
14 this chapter] public works contract for the construction,
 
15 renovation, or repair of public school facilities shall be exempt
 
16 from any requirement of a county that related off-site
 
17 improvements be made by the contracting government agency as a
 
18 condition to the issuance of any permit."
 
19      SECTION 10.  Section 103-50, Hawaii Revised Statutes, is
 
20 amended by amending subsection (a) to read as follows:
 
21      "(a)  Notwithstanding any other law to the contrary, all
 
22 plans and specifications for the construction of public buildings
 
23 and facilities by [the State or any county,] or on behalf of the
 

 
Page 12                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 State or any county [subject to this chapter,] shall be prepared
 
 2 so the buildings and facilities are accessible to and usable by
 
 3 persons with disabilities.  The buildings and facilities shall
 
 4 conform to the Americans with Disabilities Act Accessibility
 
 5 Guidelines, 36 C.F.R. Pt. 1191, as adopted and amended by the
 
 6 architectural access committee."
 
 7      SECTION 11.  Section 103-50.5, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (b) to read as follows:
 
 9      "(b)  The committee shall have the authority to vary
 
10 specific requirements of section 103-50 when the variance will
 
11 ensure an alternate design that provides [equal] reasonable
 
12 access for persons with disabilities; and to establish guidelines
 
13 for design specifications not covered in the Americans with
 
14 Disabilities Act Accessibility Guidelines, 36 C.F.R. Pt. 1191, as
 
15 adopted and amended by the architectural access committee."
 
16      SECTION 12.  Section 103-55, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "103-55  Wages, hours, and working conditions of employees
 
19 of contractors [supplying] performing services.(a)  Before any
 
20 [prospective bidder is entitled to submit any bid for the
 
21 performance of any] offeror enters into a contract to [supply]
 
22 perform services in excess of [$5,000] $25,000 to any
 
23 governmental agency, the [bidder] offeror shall certify that the
 

 
Page 13                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 services to be performed will be performed under the following
 
 2 conditions:
 
 3      Wages.  The services to be rendered shall be performed by
 
 4 employees paid at wages or salaries not less than the wages paid
 
 5 to public officers and employees for similar work.
 
 6      Compliance with labor laws.  All applicable laws of the
 
 7 federal and state governments relating to workers' compensation,
 
 8 unemployment compensation, payment of wages, and safety will be
 
 9 fully complied with.
 
10      (b)  No contract to perform services for any governmental
 
11 contracting agency in excess of [$5,000] $25,000 shall be granted
 
12 unless all the conditions of this section are met. Failure to
 
13 comply with the conditions of this section during the period of
 
14 contract to perform services shall result in cancellation of the
 
15 contract, unless such noncompliance is corrected within a
 
16 reasonable period as determined by the [contracting] procurement
 
17 officer.  [Payment in the final settlement] Final payment of a
 
18 contract or release of bonds or both shall not be made unless the
 
19 [contracting] procurement officer has determined that the
 
20 noncompliance has been corrected.
 
21      It shall be the duty of the governmental contracting agency
 
22 awarding the contract to perform services in excess of [$5,000]
 
23 $25,000 to enforce this section.
 

 
Page 14                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  This section shall apply to all contracts to perform
 
 2 services in excess of [$5,000,] $25,000, including contracts to
 
 3 supply ambulance services and janitorial services.
 
 4      This section shall not apply to:
 
 5      (1)  Managerial, supervisory, or clerical personnel.
 
 6      (2)  Contracts for supplies, materials, or printing.
 
 7      (3)  Contracts for utility services.
 
 8      (4)  Contracts to perform personal services under paragraphs
 
 9           (2), (3), (12), and (15) of section 76-16.
 
10      (5)  Contracts for professional services.
 
11     [(5)] (6)  Contracts to operate refreshment concessions in
 
12           public parks, or to provide food services to
 
13           educational institutions.
 
14     [(6)] (7)  Contracts with nonprofit institutions."
 
15      SECTION 13.  Section 103-72, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]103-72[]]  Transcription of instructional materials.
 
18 Contracts for the procurement of instructional materials shall
 
19 include a provision whereby the State has the right to transcribe
 
20 and reproduce the material in braille, large print, recordings,
 
21 or other media for the use of [handicapped] physically disabled
 
22 students, including the visually [handicapped,] impaired, unable
 
23 to use the material in conventional print and form. Such right
 

 
Page 15                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 shall include the right to make those corrections, revisions, and
 
 2 other modifications as may be necessary."
 
 3      SECTION 14.  Section 103D-102, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (b) to read as follows:
 
 5      "(b)  Notwithstanding subsection (a), this chapter shall not
 
 6 apply to contracts by governmental bodies:
 
 7      (1)  Solicited or entered into before July 1, 1994, unless
 
 8           the parties agree to its application to a contract
 
 9           solicited or entered into prior to July 1, 1994;
 
10      (2)  To disburse funds, irrespective of their source:
 
11           (A)  For grants, subsidies, or purchases of services as
 
12                those terms are defined in [section 42D-1,]
 
13                chapters 42F and 103F, made in accordance with
 
14                standards provided by law as required by article
 
15                VII, section 4, of the State Constitution; or by
 
16                the counties pursuant to their respective charters
 
17                or ordinances;
 
18           (B)  To make payments to or on behalf of public
 
19                officers and employees for salaries, fringe
 
20                benefits, professional fees, or reimbursements;
 
21           (C)  To satisfy obligations that the State is required
 
22                to pay by law, including paying fees, permanent
 
23                settlements, subsidies, or other claims, making
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                refunds, and returning funds held by the State as
 
 2                trustee, custodian, or bailee;
 
 3           (D)  For entitlement programs, including public
 
 4                assistance, unemployment, and workers'
 
 5                compensation programs, established by state or
 
 6                federal law;
 
 7           (E)  For dues and fees of organizations of which the
 
 8                State or its officers and employees are members,
 
 9                including the National Association of Governors,
 
10                the National Association of State and County
 
11                Governments, and the Multi-State Tax Commission;
 
12           (F)  For deposit, investment, or safekeeping, including
 
13                expenses related to their deposit, investment, or
 
14                safekeeping;
 
15           (G)  To governmental bodies of the State; and
 
16           (H)  As loans, under loan programs administered by a
 
17                governmental body;
 
18      (3)  To procure goods, services, or construction from a
 
19           governmental body other than the University of Hawaii
 
20           bookstores, from the federal government, or from
 
21           another state or its political subdivision; [provided
 
22           that University of Hawaii departments and programs,
 
23           without regard to this chapter, may procure goods and
 

 
Page 17                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           services from the University of Hawaii bookstores that
 
 2           are routinely stocked and marketed and not specially
 
 3           ordered;
 
 4      (4)  To procure goods or services for the office of
 
 5           intercollegiate athletics of the University of Hawaii
 
 6           at Manoa with moneys from the University of Hawaii at
 
 7           Manoa intercollegiate athletics revolving fund;
 
 8      (5)  To procure goods or services, including the following:
 
 9           (A)  Services of expert witnesses for potential and
 
10                actual litigation of legal matters involving the
 
11                State, its agencies, and its officers and
 
12                employees, including administrative quasi-
 
13                judicial proceedings;
 
14           (B)  Works of art for museum or public display;
 
15           (C)  Research and reference materials including books,
 
16                maps, periodicals, and pamphlets, which are
 
17                published in print, video, audio, magnetic, or
 
18                electronic form;
 
19           (D)  Meats and foodstuffs for the Kalaupapa settlement;
 
20           (E)  Opponents for athletic contests;
 
21           (F)  Utility services whose rates or prices are fixed
 
22                by regulatory processes or agencies;
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (G)  Performances, including entertainment, speeches,
 
 2                and cultural and artistic presentations;
 
 3           (H)  Goods and services for commercial resale by the
 
 4                State;
 
 5           (I)  Services of printers, rating agencies, support
 
 6                facilities, fiscal and paying agents, and
 
 7                registrars for the issuance and sale of the
 
 8                State's or counties' bonds; and
 
 9           (J)  Travel arrangements purchased by the University of
 
10                Hawaii for its intercollegiate athletic programs;]
 
11      (4)  For procurements which the policy board determines by
 
12           rule or the chief procurement officer determines in
 
13           writing is available from multiple sources but for
 
14           which procurement by competitive means is either not
 
15           practicable or not advantageous to the State; and
 
16     [(6)] (5)  Which are specific procurements expressly exempt
 
17           from any or all of the requirements of this chapter by:
 
18           (A)  References in state or federal law to provisions
 
19                of this chapter or a section of this chapter, or
 
20                references to a particular requirement of this
 
21                chapter; and
 
22           (B)  Trade agreements, including the Uruguay Round
 
23                General Agreement on Tariffs and Trade (GATT),
 

 
Page 19                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                which require certain non-construction and non-
 
 2                software development procurements by the
 
 3                comptroller to be conducted in accordance with its
 
 4                terms."
 
 5      SECTION 15.  Section 103D-201, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (b) to read as follows:
 
 7      "(b)  The policy board shall consist of seven members.
 
 8 Notwithstanding the limitations of section 78-5, the members of
 
 9 the board shall include:
 
10      (1)  The comptroller;
 
11      (2)  A county employee with significant high-level
 
12           procurement experience; and
 
13      (3)  Five persons who shall not otherwise be full-time
 
14           employees of[, or contractors with,] the State or any
 
15           county; provided that at least one member shall be a
 
16           certified professional in the field of procurement, at
 
17           least one member shall have significant high-level,
 
18           federal procurement experience, and at least two
 
19           members shall have significant experience in the field
 
20           of health and human services.
 
21 Each appointed member shall have demonstrated sufficient business
 
22 or professional experience to discharge the functions of the
 
23 policy board.  The initial and subsequent members of the policy
 

 
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 1 board, other than the comptroller, shall be appointed by the
 
 2 governor from a list of three individuals for each vacant
 
 3 position, submitted by a nominating committee composed of four
 
 4 individuals chosen as follows:  two persons appointed by the
 
 5 governor; one person appointed by the president of the senate;
 
 6 and one person appointed by the speaker of the house.  Except as
 
 7 provided in this section, the selection and terms of the policy
 
 8 board members shall be subject to the requirements of section 26-
 
 9 34.  No member of the policy board shall act concurrently as a
 
10 chief procurement officer.  The members of the policy board shall
 
11 devote such time to their duties as may be necessary for the
 
12 proper discharge thereof."
 
13      SECTION 16.  Section 103D-203, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "103D-203  Chief procurement officers.(a)  The chief
 
16 procurement officer for each of the following state entities
 
17 shall be:
 
18      (1)  The judiciary--the administrative director of the
 
19           courts;
 
20      (2)  The senate--the president of the senate;
 
21      (3)  The house of representatives--the speaker of the house
 
22           of representatives;
 

 
 
 
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 1      (4)  The office of Hawaiian affairs--the chairperson of the
 
 2           board;
 
 3     [(5)  The University of Hawaii--the president of the
 
 4           University of Hawaii;
 
 5      (6)] (5)  The department of education, excluding the Hawaii
 
 6           public library system--the superintendent of education;
 
 7           and
 
 8     [(7)] (6)  The remaining departments of the executive branch
 
 9           of the State and all governmental bodies
 
10           administratively attached to them--the administrator of
 
11           the state procurement office of the department of
 
12           accounting and general services.
 
13      (b)  The chief procurement officers for each of the several
 
14 counties shall be:
 
15      (1)  The executive branch--the respective finance directors
 
16           of the several counties[; and], except as provided in
 
17           paragraphs (3) and (4);
 
18      (2)  The legislative branch--the respective chairpersons of
 
19           the councils of the several counties;
 
20      (3)  The Honolulu, Kauai, and Maui boards or departments of
 
21           water supply--the respective managers and chief
 
22           engineers of the boards or departments of water supply
 
23           as designated by county charter; and
 

 
Page 22                                                    985
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 1      (4)  The Hawaii board of water supply--the manager of the
 
 2           board of water supply as designated by county charter;
 
 3 provided that the chief procurement officers designated under
 
 4 paragraphs (1) [and], (2), (3), and (4) shall not exercise their
 
 5 powers or duties over contracting in a manner contrary to the
 
 6 respective county's charter, ordinances, or rules adopted in
 
 7 accordance with chapter 91.
 
 8      (c)  For purposes of applying this chapter to the judiciary,
 
 9 houses of the legislature, office of Hawaiian affairs, department
 
10 of education, [University of Hawaii,] remaining departments of
 
11 the executive branch and all governmental bodies administratively
 
12 attached to them, and the several counties, unless otherwise
 
13 expressly provided, "State" shall mean "judiciary," "state
 
14 senate," "state house of representatives," "office of Hawaiian
 
15 affairs," "department of education," ["University of Hawaii,"]
 
16 "executive branch," [and] "county," and "board of water supply,"
 
17 or "department of water supply," respectively."
 
18      SECTION 17.  Section 103D-309, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  [No contract] Contracts awarded pursuant to section
 
21 103D-302, 103D-303, or 103D-306 shall not be binding or of any
 
22 force and effect unless the comptroller, the director of finance
 
23 of a county, or the respective chief financial officers of [the
 

 
Page 23                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 University of Hawaii,] the department of education, the
 
 2 judiciary, or the legislative branches of the State or county, as
 
 3 the case may be, endorses thereon a certificate that there is an
 
 4 appropriation or balance of an appropriation over and above all
 
 5 outstanding contracts, sufficient to cover the amount required by
 
 6 the contract; provided that if the contract is a multi-term
 
 7 contract, the comptroller, director of finance, or chief
 
 8 financial officer shall only be required to certify that there is
 
 9 an appropriation or balance of an appropriation over and above
 
10 all outstanding contracts, that is sufficient to cover the amount
 
11 required to be paid under the contract during the fiscal year or
 
12 remaining portion of the fiscal year of each term of the multi-
 
13 year contract[; provided further that this].  This section shall
 
14 not apply to any contract under which the total amount to be paid
 
15 to the contractor cannot be accurately estimated at the time the
 
16 contract is to be awarded, or to any contract for which
 
17 consideration is in kind or forbearance[.], or to any contract
 
18 awarded pursuant to section 103D-306 that is a one-time payment
 
19 through a purchase order."
 
20      SECTION 18. Section 103D-703.5, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "[[]103D-703.5[]]  Settlement [on performance bonds.] of
 
23 default by contractor.  Upon default of a contractor, the
 

 
Page 24                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 purchasing agency may accept moneys in satisfaction of the
 
 2 contractor's obligation on a contract whether such moneys are
 
 3 realized from the performance surety's obligation on its bond[.],
 
 4 an insurer's obligation on the contractor's policy, or any other
 
 5 source of moneys accepted as satisfaction of the contractor's
 
 6 default.  Such moneys shall be deemed to be trust moneys and
 
 7 shall be deposited into a trust account with and under the
 
 8 control of the purchasing agency.  These moneys and the interest
 
 9 earned thereon shall be used for the completion of such contract.
 
10 Upon completion of the contract, any excess moneys shall be
 
11 deposited in the general fund unless otherwise restricted."
 
12      SECTION 19.  Section 103D-1001.5, Hawaii Revised Statutes,
 
13 is amended to read as follows:
 
14      "[[]103D-1001.5[]]  Application of this part.  The
 
15 preferences in this part shall apply, when applicable, to
 
16 procurements made pursuant to [sections] section 103D-302 [and],
 
17 103D-303[.], or both."
 
18      SECTION 20.  Section 103D-1003, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "103D-1003  Printing, binding, and stationery work.(a)
 
21 All bids [or proposals] submitted for a printing, binding, or
 
22 stationery section 103D-302 contract in which all work will be
 
23 performed in-state, including all preparatory work, presswork,
 

 
Page 25                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 bindery work, and any other production-related work, to include
 
 2 storage and shipping costs, shall receive a fifteen per cent
 
 3 preference for purposes of bid [or proposal] evaluation.
 
 4      (b)  Where bids [or proposals] are for work performed in-
 
 5 state and out-of-state, then for the purpose of selecting the
 
 6 lowest bid [or evaluating proposals] submitted only, the amount
 
 7 bid [or proposed] for work performed out-of-state shall be
 
 8 increased by fifteen per cent.  The lowest total [offer,] bid,
 
 9 taking the preference into consideration, shall be awarded the
 
10 contract unless the solicitation provides for additional award
 
11 criteria.  The contract amount awarded, however, shall be the
 
12 amount of the price offered, exclusive of the preference."
 
13      SECTION 21.  Section 103D-1007, Hawaii Revised Statutes, is
 
14 amended by amending subsections (c) and (d) to read as follows:
 
15      "(c)  In any section 103D-302 or section 103D-303 contract
 
16 for a public works project, a state agency shall award the
 
17 contract to [a bidder] an offeror who has filed all state tax
 
18 returns due to the State and paid all amounts owing on such
 
19 returns for two successive years prior to submitting the [bid;]
 
20 offer; provided that the amount of that [bid] offer is not more
 
21 than seven per cent higher than the amount [bid] offered by any
 
22 competing contractor who has not filed or paid all applicable
 

 
 
 
Page 26                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 state taxes, and the amount of the [bid] offer by the state tax
 
 2 paying [bidder] offeror is $5,000,000 or less.
 
 3      (d)  In any section 103D-302 or section 103D-303 contract
 
 4 for a public works project, a state agency shall award the
 
 5 contract to [a bidder] an offeror who has filed all state tax
 
 6 returns due to the State and paid all amounts owing on such
 
 7 returns for four successive years prior to submitting the [bid;]
 
 8 offer; provided that the amount of that [bid] offer is not more
 
 9 than seven per cent higher than the amount [bid] offered by any
 
10 competing contractor who has not filed or paid all applicable
 
11 state taxes, and the amount of the [bid] offer by the state tax
 
12 paying [bidder] offeror is more than $5,000,000."
 
13      SECTION 22.  Section 103D-1207, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]103D-1207[]]  Annual inventory reporting by county
 
16 mayors to administrator of the state procurement office.  Each
 
17 county mayor, before September 16 of each year, shall prepare and
 
18 file with the administrator of the state procurement office an
 
19 annual inventory return of all nonexpendable state property in
 
20 the use, custody, or possession for the time being of the county
 
21 or any of its officers.  The annual inventory return shall
 
22 contain the following:
 

 
 
 
Page 27                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  A summary and list by detailed item description and
 
 2           carrying value of all nonexpendable state property on
 
 3           hand as of July 1 of the year for which the return is
 
 4           made;
 
 5      (2)  A summary and list by detailed item description and
 
 6           carrying value of all nonexpendable state property
 
 7           disposed of during the year elapsed since the return
 
 8           made as of the preceding July 1; and
 
 9      (3)  A sworn statement certifying the information on the
 
10           return, property listings, and carrying values provided
 
11           with the return to be full, true, and correct to the
 
12           best knowledge, information, and belief of the officer
 
13           making the return."
 
14      SECTION 23.  Section 103D-1208, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "[[]103D-1208[]]  Annual inventory reporting by county
 
17 officers to council.  Every officer, head of department, agent,
 
18 employee, and other person in the employ of the county, having in
 
19 their custody or under their control or using property belonging
 
20 to the county, each year within forty-five days following the
 
21 close of the county's fiscal year, shall prepare and file with
 
22 the council of the county an annual inventory return of all
 
23 nonexpendable county property in the possession, custody,
 

 
Page 28                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 control, or use of the officer, head of department, agent,
 
 2 employee, or other person making the annual inventory return, or
 
 3 of the offices or departments over which the officer presides.
 
 4 The annual inventory return shall contain the following:
 
 5      (1)  A summary and list by detailed item description and
 
 6           carrying value of all nonexpendable county property on
 
 7           hand as of the close of the county's fiscal year for
 
 8           which the return is made;
 
 9      (2)  A summary and list by detailed item description and
 
10           carrying value of all nonexpendable county property
 
11           acquired and disposed of during the year elapsed since
 
12           the return made as of the preceding close of the fiscal
 
13           year; and
 
14      (3)  A sworn statement certifying the information on the
 
15           return, property listings, and carrying values provided
 
16           with the return to be full, true, and correct to the
 
17           best knowledge, information, and belief of the officer
 
18           making the return."
 
19      SECTION 24.  Section 128-10, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "128-10  Other powers.  The governor further, irrespective
 
22 of the existence of a civil defense emergency period, may:
 

 
 
 
Page 29                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Cooperate with the President and the heads of the armed
 
 2           forces, and the civil defense agency of the United
 
 3           States, and with the officers and agencies of other
 
 4           states in matters pertaining to the civil defense of
 
 5           the State and nation and the incidents thereof, and
 
 6           take any measures which the governor may consider
 
 7           proper to carry into effect any request of the
 
 8           President or the appropriate federal officers and
 
 9           agencies, for any action looking to civil defense;
 
10      (2)  Lease, lend, or otherwise furnish, on such terms and
 
11           conditions as the governor may consider necessary to
 
12           promote the public welfare and protect the interest of
 
13           the State, any real or personal property of the state
 
14           government or its political subdivisions, to the
 
15           President, the heads of the armed forces, or to the
 
16           civil defense agency of the United States;
 
17      (3)  On behalf of the State enter into mutual aid agreements
 
18           or compacts with the federal government and with other
 
19           states.  The agreements or compacts shall be limited to
 
20           civil defense.  It may be provided in an interstate
 
21           compact, and the governor with the advice and consent
 
22           of the political subdivisions included within the scope
 
23           of the compact, may agree on behalf of the State that;
 

 
Page 30                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (A)  Each party state shall extend to the civil defense
 
 2                forces of any other party state, while operating
 
 3                within its state limits under the terms and
 
 4                conditions of the compact, the same powers (except
 
 5                that of arrest unless specifically authorized by
 
 6                the receiving state), duties, rights, privileges,
 
 7                and immunities as if they were performing their
 
 8                duties in the state in which normally employed or
 
 9                rendering services;
 
10           (B)  Whenever any person holds a license, certificate,
 
11                or other permit issued by any state evidencing the
 
12                meeting of qualifications for professional,
 
13                mechanical, or other skills, the person may render
 
14                aid involving this skill in any party state to
 
15                meet an emergency or disaster and the state shall
 
16                give due recognition to such license, certificate,
 
17                or other permit as if issued in the state in which
 
18                aid is rendered;
 
19           (C)  No party state or its officers or employees
 
20                rendering aid in another state pursuant to the
 
21                compact shall be liable on account of any act or
 
22                omission on the part of the forces while so
 
23                engaged, or on account of the maintenance or use
 

 
Page 31                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                of any materials, equipment, goods, or facilities
 
 2                in connection therewith;
 
 3           (D)  As an alternative to paragraph (C), such other or
 
 4                modified form of immunity as the governor may find
 
 5                acceptable;
 
 6           (E)  Each party state shall provide for the payment of
 
 7                compensation and death benefits to injured members
 
 8                of the civil defense forces of that state and the
 
 9                representatives of deceased members of the forces
 
10                in case the members sustain injuries or are killed
 
11                while rendering aid pursuant to the compact, in
 
12                the same manner and on the same terms as if the
 
13                injury or death were sustained within the state;
 
14           (F)  Any party state rendering aid in another state
 
15                pursuant to the compact shall be reimbursed by the
 
16                party state receiving aid, or by the United States
 
17                government under plans approved by it, for any
 
18                loss or damage to, or expense incurred in the
 
19                operation of any equipment answering a request for
 
20                aid, and for all costs incurred in connection with
 
21                requests for aid; provided that this paragraph
 
22                shall not be deemed to preclude the State, if it
 
23                is the aiding state, from assuming in whole or in
 

 
Page 32                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                part the loss, damage, expense, or other cost, or
 
 2                from loaning the equipment or donating the
 
 3                services to the receiving party state without
 
 4                charge or cost;
 
 5           (G)  Any party state receiving evacuees shall be
 
 6                reimbursed generally for the out-of-pocket
 
 7                expenses incurred in receiving and caring for the
 
 8                evacuees, for expenditures for transportation,
 
 9                food, clothing, medicines, and medical care, and
 
10                like items; the expenditures shall be reimbursed
 
11                by the party state of which the evacuees are
 
12                residents, or by the United States government
 
13                under plans approved by it; and
 
14           (H)  In the event of an evacuation, the party state of
 
15                which the evacuees are residents shall, after the
 
16                termination of the emergency or disaster, assume
 
17                the responsibility for the ultimate support or
 
18                repatriation of the evacuees;
 
19      (4)  Sponsor and develop mutual aid plans and agreements for
 
20           civil defense between the political subdivisions of the
 
21           State and between one or more political subdivisions
 
22           and other public or private agencies, for the
 
23           furnishing or exchange of food, clothing, medicine, and
 

 
Page 33                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           other materials; engineering services, emergency
 
 2           housing; police services; health, medical, and related
 
 3           services; fire fighting, rescue, transportation, and
 
 4           construction services and facilities; personnel
 
 5           necessary to provide or conduct these services; and
 
 6           such other materials, facilities, personnel, and
 
 7           services as may be needed. The mutual aid plans and
 
 8           agreements may be made with or without provisions for
 
 9           reimbursement of costs and expenses, and on such terms
 
10           and conditions as are deemed necessary;
 
11      (5)  Order and direct government agencies, officers, and
 
12           employees, state or local, to take such action and
 
13           employ such measures for law enforcement, medical,
 
14           health, fire fighting, traffic control, warnings, and
 
15           signals, engineering, rescue, construction, emergency
 
16           housing, and other welfare, hospitalization,
 
17           transportation, water supply, public information,
 
18           training, and other civil defense and emergency
 
19           functions as may be necessary, and utilize the
 
20           services, materials, and facilities of the agencies and
 
21           officers.  All such agencies and officers shall
 
22           cooperate with and extend their services, materials,
 

 
 
 
Page 34                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           and facilities to the governor as the governor may
 
 2           request;
 
 3      (6)  Take possession of, use, manage, control, and
 
 4           reallocate any public property, state or county, real
 
 5           or personal, required by the governor for the purposes
 
 6           of this chapter, including, without limitation,
 
 7           airports, parks, playgrounds, and schools, and other
 
 8           public buildings.  Whenever the property is so taken
 
 9           the governor shall have power to make such provision
 
10           for the temporary accommodation of the government
 
11           service affected thereby as the governor may deem
 
12           advisable.  Like provisions may be made at any time
 
13           whenever it is necessary to relocate any government
 
14           service because of any emergency condition;
 
15      (7)  Utilize all services, materials, and facilities of
 
16           nongovernmental agencies, relief organizations,
 
17           community associations, and other civil groups and
 
18           private agencies that may be made available;
 
19      (8)  Receive, expend, or use contributions or grants in
 
20           money, property, or services, or loans of property, or
 
21           special contributions or grants in money, property, or
 
22           services, or loans of property, for special purposes
 
23           provided for by this chapter; establish funds in the
 

 
Page 35                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           treasury for the deposit and expenditure of the moneys;
 
 2           procure federal aid as the same may be available, and
 
 3           apply the provisions of chapter 29 in cases of federal
 
 4           aid even though not in the form of money.  The
 
 5           contributions or grants are appropriated for the
 
 6           purposes of this chapter, or for the special purposes;
 
 7      (9)  Provide for the repair and maintenance of public
 
 8           property, whenever adequate provision therefor is not
 
 9           otherwise made; insure the property against any war
 
10           risk, including without limitation damage or loss
 
11           resulting from or arising out of an attack or action in
 
12           resisting or combating an attack or apparent attack;
 
13           provide for the restoration, renovation, replacement,
 
14           or reconstruction of insured property in the event of
 
15           damage or loss, and make temporary restoration of
 
16           public utilities and other vital facilities in the
 
17           event of an attack or other disaster;
 
18     (10)  Purchase, make, produce, construct, rent, lease, or
 
19           procure by condemnation or otherwise, transport, store,
 
20           install, maintain, and insure, repair, renovate,
 
21           restore, replace, or reconstruct, and distribute,
 
22           furnish, or otherwise dispose of, with or without
 
23           charges therefor, materials and facilities for civil
 

 
Page 36                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           defense and other emergency functions; procure federal
 
 2           aid therefor whenever feasible; and take any measures
 
 3           which may, in the governor's opinion, secure,
 
 4           stimulate, or increase similar activities by private or
 
 5           public persons or organizations.  Chapter 103D,
 
 6           sections [103-49,] 103-50, 103-50.5, 103-53 [through
 
 7           103-57], 103-55, 105-1 to 105-10, and 464-4 shall not
 
 8           apply to any civil defense or other emergency functions
 
 9           if and to the extent that the governor finds that the
 
10           provisions, in whole or in part, impede or tend to
 
11           impede the expeditious discharge of the functions, or
 
12           that compliance therewith is impracticable due to
 
13           existing conditions. In cases of extreme urgency during
 
14           a civil defense emergency period the governor may
 
15           suspend the penal provisions of sections 46-45 and 103-
 
16           9, except those provisions that concern falsification;
 
17     (11)  Appoint, employ, train, equip, and maintain, with
 
18           compensation, or on a volunteer basis without
 
19           compensation and without regard to chapters 76, 77, and
 
20           79, part II of chapter 88 and section 78-1, such
 
21           agencies, officers, and other persons as the governor
 
22           deems necessary to carry out this chapter; determine to
 
23           what extent any law prohibiting the holding of more
 

 
Page 37                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           than one office or employment applies to the agencies,
 
 2           officers, and other persons; and subject to section
 
 3           128-15, provide for and effect the interchange of
 
 4           personnel, by detail, transfer, or otherwise, between
 
 5           the State and any political subdivision, or among any
 
 6           agencies or departments of the State;
 
 7     (12)  Make charges in such cases and in such amounts as the
 
 8           governor deems advisable, for any property sold, work
 
 9           performed, services rendered, or accommodations or
 
10           facilities furnished by the government under this
 
11           chapter; and make charges for licenses or permits to
 
12           cover administrative expense connected therewith;
 
13     (13)  Make such contracts as may be necessary to carry out
 
14           this chapter;
 
15     (14)  Establish special accounting forms and practices
 
16           whenever necessary; and
 
17     (15)  Take any and all steps necessary or appropriate to
 
18           carry out the purposes of this chapter and to provide
 
19           for civil defense and other emergency functions.
 
20 The powers and authority conferred upon the governor by this
 
21 chapter are in addition to any other powers or authority
 
22 conferred upon the governor by the laws of the United States and
 
23 of the State for the same or a like purpose, and shall not be
 

 
Page 38                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 construed as abrogating, limiting, or modifying any such powers,
 
 2 or authority."
 
 3      SECTION 25.  Section 128-13, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "128-13  Power and authority of local organizations.  Each
 
 6 political subdivision shall have the power and authority:
 
 7      (1)  Deputy director's staff.  To provide, for the deputy
 
 8           director of such political subdivision, an assistant or
 
 9           assistants whose appointment shall be approved by the
 
10           director of civil defense, and such technical,
 
11           clerical, stenographic, and other personnel, office
 
12           space, furniture, equipment, supplies, and funds as may
 
13           be necessary to carry out the purposes of this chapter.
 
14           Chapter 76 shall apply to the full-time deputy director
 
15           or the deputy director's first assistant.
 
16      (2)  Appropriations, etc. To make appropriations and
 
17           authorize expenditures for the purposes of this
 
18           chapter, including the power to place under the control
 
19           of the governor, for expenditure as matching funds for
 
20           federal aid, or for any purpose within the powers of
 
21           the governor, moneys appropriated by it; to make
 
22           appropriations and authorize expenditures for the
 
23           purposes of this chapter out of the normal revenues or
 

 
Page 39                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           fund balances or surpluses of the political
 
 2           subdivision, notwithstanding any legal restrictions
 
 3           upon the purposes for which the funds may be expended,
 
 4           except[,] that pension and retirement funds, funds set
 
 5           aside for the redemption of bonds or the payment of
 
 6           interest thereon, trust funds, loan funds, and funds
 
 7           received from the federal government or from any person
 
 8           for specific purposes shall not be affected.
 
 9      (3)  Procurement, etc. To purchase, make, produce,
 
10           construct, rent, lease, or procure by condemnation, or
 
11           otherwise, transport, store, install, maintain, and
 
12           insure, repair, renovate, restore, replace or
 
13           reconstruct, and distribute, furnish or otherwise
 
14           dispose of, with or without charges, materials and
 
15           facilities for civil defense; and to procure federal
 
16           aid therefor whenever feasible.  Chapter 103D, sections
 
17           [103-41 to 103-57,] 103-50, 103-50.5, 103-53, 103-55,
 
18           105-1 to 105-10, and 464-4 shall not apply to any civil
 
19           defense functions of and to the extent that the mayor
 
20           finds that the provisions, in whole or in part, impede
 
21           or tend to impede the expeditious discharge of the
 
22           functions, or that compliance therewith is
 
23           impracticable due to existing conditions.
 

 
Page 40                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (4)  Personnel.  To provide for the appointment, employment,
 
 2           training, equipping, and maintaining, with
 
 3           compensation, or on a volunteer basis without
 
 4           compensation and without regard to chapters 76, 77, 79,
 
 5           and 88 and section 78-1, of such agencies, officers,
 
 6           and other persons as it deems necessary to carry out
 
 7           this chapter; to determine to what extent any law
 
 8           prohibiting the holding of more than one office or
 
 9           employment applies to the agencies, officers, and other
 
10           persons; and subject to section 128-15, to provide for
 
11           the interchange of personnel, by detail, transfer or
 
12           otherwise, between agencies or departments of the
 
13           political subdivision, or between political
 
14           subdivisions.
 
15      (5)  Contributions.  To receive, expend, or use
 
16           contributions or grants in money, property, or
 
17           services, or loans of property, or special
 
18           contributions or grants in money, property, or
 
19           services, or loans of property, for special purposes
 
20           provided for by this chapter.
 
21      (6)  Charges.  To make charges in such cases and in such
 
22           amounts as it deems advisable, for any property sold,
 
23           work performed, services rendered, or accommodations or
 

 
Page 41                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           facilities furnished by the political subdivision under
 
 2           this chapter.
 
 3      (7)  Contracts.  To make or authorize such contracts as may
 
 4           be necessary to carry out this chapter.
 
 5      (8)  Mutual aid plans. To participate in and carry out
 
 6           mutual aid plans and agreements or compacts, sponsored
 
 7           or developed by the state civil defense agency.
 
 8      (9)  Continuity of government.  To insure continuity of
 
 9           government during a civil defense emergency period, the
 
10           legislative body of a county may by ordinance, unless
 
11           otherwise provided by law, provide the procedure for
 
12           the appointment and designation of stand-by officers
 
13           for the legislative body and the elected chief
 
14           executive of the county for the emergency period, who
 
15           shall serve in the event of the unavailability of the
 
16           officers for whom they stand by."
 
17      SECTION 26.  Section 382-3, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "382-3  Government operations.  After the issuance of a
 
20 proclamation pursuant to section 382-2 and during the emergency
 
21 thereby proclaimed, the governor may seize and take possession of
 
22 and operate the entire plant and facilities, including related
 
23 facilities, of any stevedoring company whose operations are
 

 
Page 42                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 suspended or substantially reduced, or so much thereof, or such
 
 2 interest therein, as the governor may deem necessary in order to
 
 3 carry out the purposes of this chapter.
 
 4      Such government operations may be conducted by the governor
 
 5 through such department or agency of the State as the governor
 
 6 may designate and the governor may delegate to such agency such
 
 7 of the governor's powers as are necessary to conduct the
 
 8 operations.
 
 9      The governor shall have such power and authority as shall be
 
10 reasonably necessary to conduct such government operations in a
 
11 manner consistent with the public health, safety, and welfare,
 
12 including, without limitation upon the generality of the
 
13 foregoing, the power to make such contracts and arrangements with
 
14 ship owners, charterers, agents, and operators, wharf and pier
 
15 owners and operators, stevedoring companies, trucking operators,
 
16 warehouse workers and other persons as may be required in order
 
17 to provide stevedoring services and related services.  The
 
18 governor may make contracts without regard to chapter 103D and
 
19 sections [103-41 to 103-57] 103-50, 103-50.5, 103-53, and 103-55
 
20 and, specifically, the certificate of the comptroller as to the
 
21 availability of an unexpended appropriation or balance of an
 
22 appropriation to cover the amount required by any such contract
 
23 shall not be required."
 

 
Page 43                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 27.  Section 103-15, Hawaii Revised Statutes, is
 
 2 repealed.
 
 3      ["103-15  Contract provisions to consider traffic.(a)
 
 4 Unless otherwise prohibited by law, all public contracts awarded
 
 5 under this chapter shall consider the extent to which the work
 
 6 undertaken pursuant to the contract will increase traffic
 
 7 congestion.  The contract shall contain provisions to reasonably
 
 8 minimize any adverse impact.
 
 9      (b)  The feasibility of off-hour construction shall be
 
10 considered for all public contracts that result in significant
 
11 traffic congestion or delay during the term of the contract.
 
12      (c)  As used in this section, "off-hour construction" means
 
13 construction performed between the hours of six o'clock p.m. and
 
14 six o'clock a.m."]
 
15      SECTION 28.  Section 103-21, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["103-21  Officer defined.  The term "procurement officer"
 
18 as used in chapter 103D with respect to contracts entered into by
 
19 a county or a board, bureau, or commission thereof authorized to
 
20 contract in its own behalf, means the council of the county or
 
21 the governing body of such board, bureau, or commission as
 
22 constituted by law, or such officer as is authorized by the
 

 
 
 
Page 44                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 county council or the board, bureau, or commission to act as its
 
 2 contracting officer."]
 
 3      SECTION 29.  Section 103-22.1, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      ["103-22.1  Services of the handicapped.  When a
 
 6 governmental agency contracts for or purchases services, five per
 
 7 cent preference shall be given to services to be performed by
 
 8 nonprofit corporations or public agencies operating sheltered
 
 9 workshops servicing the handicapped in conformance with criteria
 
10 established by the department of labor and industrial relations
 
11 pursuant to chapter 91; provided that service contracts awarded
 
12 under this section shall be exempt from the wages provision of
 
13 section 103-55.  The state comptroller shall adopt rules under
 
14 chapter 91 to establish the preference for the services to be
 
15 performed by nonprofit corporations or public agencies operating
 
16 sheltered workshops consistent with this section."]
 
17      SECTION 30.  Section 103-24.6, Hawaii Revised Statutes, is
 
18 repealed.
 
19      ["103-24.6  Indigenous and Polynesian introduced plants;
 
20 use in public landscaping.(a)  Wherever and whenever feasible,
 
21 all plans, designs, and specifications for new or renovated
 
22 landscaping of any building, complex of buildings, facility,
 
23 complex of facilities, or housing developed by the State with
 

 
Page 45                                                    985
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 public moneys shall incorporate indigenous land plant species, as
 
 2 defined in section 195D-2, and plant species brought to Hawaii by
 
 3 Polynesians before European contact, such as the kukui, noni, and
 
 4 coconut; provided that suitable cultivated plants can be made
 
 5 available for this purpose without jeopardizing wild plants in
 
 6 their natural habitat; and provided further that wherever and
 
 7 whenever possible, indigenous land plants shall be used for
 
 8 landscaping on the island or islands on which the species
 
 9 originated.
 
10      (b)  Each plant or group of plants used pursuant to
 
11 subsection (a) shall be clearly identified with signs for the
 
12 edification of the general public.
 
13      (c)  The policy board shall adopt rules pursuant to chapter
 
14 91 to carry out the purposes of this section."]
 
15      SECTION 31.  Section 103-49, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["103-49  Value engineering clauses; rules.  The State and
 
18 each of the respective counties shall insert clauses providing
 
19 for value engineering incentives in all public works contracts
 
20 for amounts in excess of $100,000.  The clauses shall provide:
 
21      (1)  That cost reduction proposals submitted by contractors:
 
22           (A)  Must require, in order to be applied to the
 
23                contract, a change order thereto; and
 

 
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 1           (B)  Must result in savings to the State or county, as
 
 2                the case may be, by providing less costly items
 
 3                than those specified in the contract without
 
 4                impairing any of their essential functions and
 
 5                characteristics such as service life, reliability,
 
 6                economy of operation, ease of maintenance, and
 
 7                necessary standardized features.
 
 8      (2)  That accepted cost reduction proposals shall result in
 
 9           an equitable adjustment of the contract price so that
 
10           the contractor will share a portion of the realized
 
11           cost reduction.
 
12      The policy office shall adopt, pursuant to chapter 91, such
 
13 rules as may be necessary and proper to implement this section,
 
14 provide adequate incentives to contractors, realize savings for
 
15 the State or counties, and to otherwise carry out the purposes of
 
16 this section."]
 
17      SECTION 32.  Section 103-53.5, Hawaii Revised Statutes, is
 
18 repealed.
 
19      ["103-53.5  Tax adjustment for out-of-state vendors and
 
20 tax-exempt bidders.  Where the bidder or vendor is an out-of-
 
21 state vendor not doing business in the State or is a person
 
22 exempted from paying the applicable general excise tax, the
 
23 package bid or purchase price, for the purpose of determining the
 

 
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 1 lowest price bid, shall be increased by the applicable retail
 
 2 rate of general excise tax and the applicable use tax. The lowest
 
 3 responsible bidder, taking into consideration the above
 
 4 increases, shall be awarded the contract, but the contract amount
 
 5 of any contract awarded shall not include the amount of the
 
 6 increases."]
 
 7      SECTION 33.  Section 103-54, Hawaii Revised Statutes, is
 
 8 repealed.
 
 9      ["103-54  Wages of certain laborers paid weekly; penalty.
 
10 All contracts executed pursuant to this chapter involving the
 
11 employment of laborers shall provide for weekly payment of wages
 
12 to all laborers whose rate of compensation is $5 or less per day.
 
13 Every laborer employed by the contractor or any subcontractor
 
14 under any such contract whose rate of compensation is $5 or less
 
15 per day shall be paid the laborer's wages weekly by the laborer's
 
16 employer, whether or not the requirement is set forth in the
 
17 contract.  Every contractor or subcontractor who violates this
 
18 section shall be fined not more than $500."]
 
19      SECTION 34.  Section 103-56, Hawaii Revised Statutes, is
 
20 repealed.
 
21      ["103-56  Pay days.  Except as provided in section 103-54
 
22 the fifteenth and last days in each month shall be the pay days
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 of all employees engaged in constructing or repairing roads,
 
 2 bridges, or streets for the State."]
 
 3      SECTION 35.  Section 103-57, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      ["103-57  Only citizens employed, exception.  No person
 
 6 shall be employed as a mechanic or laborer upon any public work
 
 7 carried on by the State or by any political subdivision thereof,
 
 8 whether the work is done by contract or otherwise, unless the
 
 9 person is a citizen of the United States and of the State or
 
10 eligible to become such a citizen; provided that in cases where
 
11 it is not reasonably practicable to obtain competent persons with
 
12 the foregoing qualifications, persons without such qualifications
 
13 may, with the approval of the governor where the compensation for
 
14 such employment is paid out of state funds, or with the approval
 
15 of the mayor where the compensation for such employment is paid
 
16 out of county funds or out of funds under the control of any
 
17 county board, bureau, or commission, be employed until persons
 
18 with such qualifications competent for such services can be
 
19 obtained."]
 
20      SECTION 36.  Section 103-58, Hawaii Revised Statutes, is
 
21 repealed.
 
22      ["103-58  Officers, etc., forbidden interest in government
 
23 contracts.  No officer or head of any department of the State or
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 of any political or municipal subdivision thereof having the
 
 2 power to make or award a contract on the part of the government
 
 3 shall, on behalf of the State or of such subdivision thereof
 
 4 under which he may be elected or appointed, as the case may be,
 
 5 make, or award, or participate in the awarding of a contract to
 
 6 himself or to any partnership or corporation in which he is a
 
 7 member or stockholder when the contract involves the expenditure
 
 8 of government funds in excess of $50.
 
 9      Nor shall any officer or head of any department of the State
 
10 or any subdivision thereof before or after award of contracts,
 
11 gain an interest as subcontractor or otherwise for which he shall
 
12 receive a consideration of over $50 in any contract which he has
 
13 made or awarded or participated in the making or awarding of, on
 
14 behalf of the State or on behalf of any subdivision thereof under
 
15 which he may be elected or appointed, as the case may be.  This
 
16 section shall not apply (1) if the contract is made with a
 
17 corporation in which the officer of the State or any subdivision
 
18 thereof has the ownership of not more than five per cent of the
 
19 capital stock if it be a corporation or joint stock company; (2)
 
20 if any contract made by the State or any subdivision thereof is
 
21 awarded to the lowest responsible bidder after advertisement for
 
22 sealed tenders according to law in cases where the sum to be
 
23 expended is $1,000 or more; or (3) if any contract is awarded to
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 the lowest responsible bidder when requests of the same character
 
 2 have been made to the principal dealers, contractors, persons,
 
 3 partnerships, or corporations doing such work or selling such
 
 4 commodities for sealed tenders for the same in cases where the
 
 5 sum to be expended is more than $50 and less than $100."]
 
 6      SECTION 37.  Section 103-59, Hawaii Revised Statutes, is
 
 7 repealed.
 
 8      ["103-59  Violation voids contract.  A violation of section
 
 9 103-58 shall render the contract or agreement in respect of which
 
10 such violation occurs void."]
 
11      SECTION 38.  Section 103-60, Hawaii Revised Statutes, is
 
12 repealed.
 
13      ["103-60  Penalty.  Any person who violates section 103-58
 
14 shall be fined not more than $1,000 or imprisoned not more than
 
15 one year, or both."]
 
16      SECTION 39.  Section 103-71, Hawaii Revised Statutes, is
 
17 repealed.
 
18      ["[103-71]  Energy efficiency through life-cycling costing.
 
19 (a)  The procurement practices of the State and its counties
 
20 shall include energy efficiency standards and policies, including
 
21 life-cycle costing.  These shall be developed and introduced into
 
22 procurement procedures by July 1, 1978.
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  In implementing life-cycle costing, the purchasing
 
 2 agent shall be guided by energy efficiency standards and policies
 
 3 for purchasing various items developed and promulgated by the
 
 4 United States Department of Energy and other federal agencies,
 
 5 and by nationally recognized trade associations, including but
 
 6 not limited to the Institute of Government Purchasing Agents, the
 
 7 Purchasing Management Association, and the Air Conditioning and
 
 8 Refrigeration Institute.  The purchasing agent shall notify
 
 9 bidders of information, procedures and forms required in
 
10 implementing energy efficiency standards and policies.  The
 
11 information required shall include purchasing standards and
 
12 policies developed by federal agencies and by nationally
 
13 recognized agencies and associations, as well as energy
 
14 consumption and life-cycle cost data.
 
15      (c)  The purchaser shall consider purchasing via the life-
 
16 cycle costing method those classes of items for which nationally
 
17 recognized energy efficiency data have been developed.  These
 
18 items shall include but not be limited to automobiles and air
 
19 conditioning systems.  The watt-saving variety of common-sized
 
20 fluorescent lamps shall be purchased except where standard
 
21 wattage of such lamps is specifically required by the using
 
22 agency."]
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 40.  Parts III and V of chapter 103, Hawaii Revised
 
 2 Statutes, are repealed.
 
 3      SECTION 41.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 42.  This Act shall take effect on July 1, 1999.