REPORT TITLE:
Procurement Code

DESCRIPTION:
Improves the efficiency of the procurement code. Repeals the
provisions allowing public agency to purchase from nonprofit
rehabilitation facilities without advertising or calling out for
bids.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.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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 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 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 necessary for the purposes of this section.
 
15      103D-    Provisions for pollution control.  All public
 
16 contracts awarded pursuant to this chapter shall make provisions
 
17 for control of pollution when encountered in the performance of
 
18 the contract.
 
19      103D-    Energy efficiency through life-cycle costing. (a)
 
20 The procurement practices of the State and its counties shall
 
21 include energy efficient standards and policies, including life-
 
22 cycle costing.
 
23      (b)  In implementing life-cycle costing, the purchasing
 

 
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 1 agency shall be guided by energy efficiency standards and
 
 2 policies for purchasing various items developed and promulgated
 
 3 by the United States Department of Energy and other federal
 
 4 agencies, and by nationally recognized trade associations,
 
 5 including but not limited to the National Association of State
 
 6 Purchasing Officials, the National Institute of Governmental
 
 7 Purchasing, Inc., the National Association of Purchasing
 
 8 Management, and the Air Conditioning and Refrigeration Institute.
 
 9 The purchasing agency shall notify bidders of information,
 
10 procedures, and forms required in implementing energy efficiency
 
11 standards and policies.  The information required shall include
 
12 purchasing standards and policies developed by federal agencies
 
13 and by nationally recognized agencies and associations, as well
 
14 as energy consumption and life-cycle cost data.
 
15      (c)  The purchasing agency shall consider purchasing via the
 
16 life-cycle costing method those classes of items for which
 
17 nationally recognized energy efficiency data have been developed.
 
18 These items shall include but not be limited to motor vehicles
 
19 and air conditioning systems.  The watt-saving variety of common-
 
20 sized fluorescent lamps shall be purchased except where the
 
21 standard wattage of such lamps is specifically required by the
 
22 using agency.
 
23      103D-    Value engineering clauses.  The State and each of
 

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

 
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 1 use tax.  For competitive sealed bids, the lowest responsive,
 
 2 responsible bidder, taking into consideration the above increase,
 
 3 shall be awarded the contract, but the contract amount of any
 
 4 contract awarded shall be the amount of the price offered and
 
 5 shall not include the amount of the increase."
 
 6      SECTION 4.  Chapter 103, Hawaii Revised Statutes, is amended
 
 7 by amending the title to read as follows:
 
 8                           "CHAPTER 103
 
 9        EXPENDITURE OF PUBLIC MONEY [AND PUBLIC CONTRACTS]"
 
10      SECTION 5.  Section 103-32.1, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "103-32.1  Contract provision for retainage.  Any public
 
13 contract [issued under this chapter] may include a provision for
 
14 the retainage of a portion of the amount due under the contract
 
15 to the contractor to insure the proper performance of the
 
16 contract; provided that [the]:
 
17      (1)  The sum withheld by the [contracting] procurement
 
18           officer from the contractor shall not exceed five per
 
19           cent of the amount due the contractor and that after
 
20           fifty per cent of the contract is completed and
 
21           progress is satisfactory, no additional sum shall be
 
22           withheld; [provided further that if]
 
23      (2)  If progress is not satisfactory, the [contracting]
 

 
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 1           procurement officer may continue to withhold as
 
 2           retainage, sums not exceeding five per cent of the
 
 3           amount due the contractor[.]; and
 
 4      (3)  The retainage shall not include sums deducted as
 
 5           liquidated damages from moneys due or that may become
 
 6           due the contractor under the contract."
 
 7      SECTION 6.  Section 103-32.2, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]103-32.2[]]  Substitution of retainage.  Any other law
 
10 to the contrary notwithstanding, any public contract [issued
 
11 under this chapter] may provide that the [contracting]
 
12 procurement officer may enter into an agreement with the
 
13 contractor which will allow the contractor to withdraw from time
 
14 to time the whole or any portion of the sum retained under
 
15 section 103-32.1 upon depositing with the [contracting]
 
16 procurement officer any general obligation bond of the State or
 
17 its political subdivisions with a market value not less than the
 
18 sum to be withdrawn; provided that the [contracting] procurement
 
19 officer may require that the total market value of such bond be
 
20 greater than the sum to be withdrawn."
 
21      SECTION 7.  Section 103-39.5, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "[[]103-39.5[]]  Construction, renovation, or repair of
 

 


 

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 1 school facilities; county permit exemption.  Any [contracts under
 
 2 this chapter] public works contract for the construction,
 
 3 renovation, or repair of public school facilities shall be exempt
 
 4 from any requirement of a county that related off-site
 
 5 improvements be made by the contracting government agency as a
 
 6 condition to the issuance of any permit."
 
 7      SECTION 8.  Section 103-50, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (a) to read as follows:
 
 9      "(a)  Notwithstanding any other law to the contrary, all
 
10 plans and specifications for the construction of public buildings
 
11 and facilities by [the State or any county,] or on behalf of the
 
12 State or any county [subject to this chapter,] shall be prepared
 
13 so the buildings and facilities are accessible to and usable by
 
14 persons with disabilities.  The buildings and facilities shall
 
15 conform to the Americans with Disabilities Act Accessibility
 
16 Guidelines, 36 C.F.R. Pt. 1191, as adopted and amended by the
 
17 architectural access committee."
 
18      SECTION 9.  Section 103-50.5, Hawaii Revised Statutes, is
 
19 amended by amending subsection (b) to read as follows:
 
20      "(b)  The committee shall have the authority to vary
 
21 specific requirements of section 103-50 when the variance will
 
22 ensure an alternate design that provides [equal] reasonable
 
23 access for persons with disabilities; and to establish guidelines
 

 
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 1 for design specifications not covered in the Americans with
 
 2 Disabilities Act Accessibility Guidelines, 36 C.F.R. Pt. 1191, as
 
 3 adopted and amended by the architectural access committee."
 
 4      SECTION 10.  Section 103-55, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "103-55  Wages, hours, and working conditions of employees
 
 7 of contractors [supplying] performing services.(a)  Before any
 
 8 [prospective bidder is entitled to submit any bid for the
 
 9 performance of any] offeror enters into a contract to [supply]
 
10 perform services in excess of [$5,000 to] $25,000 for to any
 
11 governmental agency, the [bidder] offeror shall certify that the
 
12 services to be performed will be performed under the following
 
13 conditions:
 
14      Wages.  The services to be rendered shall be performed by
 
15 employees paid at wages or salaries not less than the wages paid
 
16 to public officers and employees for similar work.
 
17      Compliance with labor laws.  All applicable laws of the
 
18 federal and state governments relating to workers' compensation,
 
19 unemployment compensation, payment of wages, and safety will be
 
20 fully complied with.
 
21      (b)  No contract to perform services for any governmental
 
22 contracting agency in excess of [$5,000] $25,000 shall be granted
 
23 unless all the conditions of this section are met. Failure to
 

 
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 1 comply with the conditions of this section during the period of
 
 2 contract to perform services shall result in cancellation of the
 
 3 contract, unless such noncompliance is corrected within a
 
 4 reasonable period as determined by the [contracting] procurement
 
 5 officer.  [Payment in the final settlement] Final payment of a
 
 6 contract or release of bonds or both shall not be made unless the
 
 7 [contracting] procurement officer has determined that the
 
 8 noncompliance has been corrected.
 
 9      It shall be the duty of the governmental contracting agency
 
10 awarding the contract to perform services in excess of [$5,000]
 
11 $25,000 to enforce this section.
 
12      (c)  This section shall apply to all contracts to perform
 
13 services in excess of [$5,000,] $25,000, including contracts to
 
14 supply ambulance services and janitorial services.
 
15      This section shall not apply to:
 
16      (1)  Managerial, supervisory, or clerical personnel.
 
17      (2)  Contracts for supplies, materials, or printing.
 
18      (3)  Contracts for utility services.
 
19      (4)  Contracts to perform personal services under paragraphs
 
20           (2), (3), (12), and (15) of section 76-16.
 
21      (5)  Contracts for professional services.
 
22     [(5)] (6)  Contracts to operate refreshment concessions in
 
23           public parks, or to provide food services to
 

 
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 1           educational institutions.
 
 2     [(6)] (7)  Contracts with nonprofit institutions."
 
 3      SECTION 11.  Section 103-72, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]103-72[]]  Transcription of instructional materials.
 
 6 Contracts for the procurement of instructional materials shall
 
 7 include a provision whereby the State has the right to transcribe
 
 8 and reproduce the material in braille, large print, recordings,
 
 9 or other media for the use of [handicapped] physically disabled
 
10 students, including the visually [handicapped,] impaired, unable
 
11 to use the material in conventional print and form. Such right
 
12 shall include the right to make those corrections, revisions, and
 
13 other modifications as may be necessary."
 
14      SECTION 12.  Section 103D-102, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "103D-102  Application of this chapter.  (a)  This chapter
 
17 shall apply to all procurement contracts made by governmental
 
18 bodies whether the consideration for the contract is cash,
 
19 revenues, realizations, receipts, or earnings, any of which the
 
20 State receives or is owed; in-kind benefits; or forbearance;
 
21 provided that nothing in this chapter or rules adopted hereunder
 
22 shall prevent any governmental body from complying with the terms
 
23 and conditions of any other grant, gift, bequest, or cooperative
 

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

 
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 1                assistance, unemployment, and workers'
 
 2                compensation programs, established by state or
 
 3                federal law;
 
 4           (E)  For dues and fees of organizations of which the
 
 5                State or its officers and employees are members,
 
 6                including the National Association of Governors,
 
 7                the National Association of State and County
 
 8                Governments, and the Multi-State Tax Commission;
 
 9           (F)  For deposit, investment, or safekeeping, including
 
10                expenses related to their deposit, investment, or
 
11                safekeeping;
 
12           (G)  To governmental bodies of the State; and
 
13           (H)  As loans, under loan programs administered by a
 
14                governmental body;
 
15      (3)  To procure goods, services, or construction from a
 
16           governmental body other than the University of Hawaii
 
17           bookstores, from the federal government, or from
 
18           another state or its political subdivision; [provided
 
19           that University of Hawaii departments and programs,
 
20           without regard to this chapter, may procure goods and
 
21           services from the University of Hawaii bookstores that
 
22           are routinely stocked and marketed and not specially
 
23           ordered;
 

 
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 1      (4)  To procure goods or services for the office of
 
 2           intercollegiate athletics of the University of Hawaii
 
 3           at Manoa with moneys from the University of Hawaii at
 
 4           Manoa intercollegiate athletics revolving fund;
 
 5      (5)  To procure goods or services, including the following:
 
 6           (A)  Services of expert witnesses for potential and
 
 7                actual litigation of legal matters involving the
 
 8                State, its agencies, and its officers and
 
 9                employees, including administrative quasi-
 
10                judicial proceedings;
 
11           (B)  Works of art for museum or public display;
 
12           (C)  Research and reference materials including books,
 
13                maps, periodicals, and pamphlets, which are
 
14                published in print, video, audio, magnetic, or
 
15                electronic form;
 
16           (D)  Meats and foodstuffs for the Kalaupapa settlement;
 
17           (E)  Opponents for athletic contests;
 
18           (F)  Utility services whose rates or prices are fixed
 
19                by regulatory processes or agencies;
 
20           (G)  Performances, including entertainment, speeches,
 
21                and cultural and artistic presentations;
 
22           (H)  Goods and services for commercial resale by the
 
23                State;
 

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

 
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 1                terms.
 
 2      (c)  Governmental bodies making procurements which are
 
 3 exempt from this chapter are nevertheless encouraged to adopt and
 
 4 use provisions of this chapter and its implementing rules as
 
 5 appropriate; provided that the use of one or more provisions
 
 6 shall not constitute a waiver of the exemption conferred and
 
 7 subject the procurement or the governmental body to any other
 
 8 provision of this chapter."
 
 9      SECTION 13.  Section 103D-201, Hawaii Revised Statutes, is
 
10 amended by amending subsection (b) to read as follows:
 
11      "(b)  The policy board shall consist of seven members.
 
12 Notwithstanding the limitations of section 78-5, the members of
 
13 the board shall include:
 
14      (1)  The comptroller;
 
15      (2)  A county employee with significant high-level
 
16           procurement experience; and
 
17      (3)  Five persons who shall not otherwise be full-time
 
18           employees of[, or contractors with,] the State or any
 
19           county; provided that at least one member shall be a
 
20           certified professional in the field of procurement, at
 
21           least one member shall have significant high-level,
 
22           federal procurement experience, and at least two
 
23           members shall have significant experience in the field
 

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

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

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

 
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 1 103D-302, 103D-303, or 103D-306 shall not be binding or of any
 
 2 force and effect unless the comptroller, the director of finance
 
 3 of a county, or the respective chief financial officers of [the
 
 4 University of Hawaii,] the department of education, the
 
 5 judiciary, or the legislative branches of the State or county, as
 
 6 the case may be, endorses thereon a certificate that there is an
 
 7 appropriation or balance of an appropriation over and above all
 
 8 outstanding contracts, sufficient to cover the amount required by
 
 9 the contract; provided that if the contract is a multi-term
 
10 contract, the comptroller, director of finance, or chief
 
11 financial officer shall only be required to certify that there is
 
12 an appropriation or balance of an appropriation over and above
 
13 all outstanding contracts, that is sufficient to cover the amount
 
14 required to be paid under the contract during the fiscal year or
 
15 remaining portion of the fiscal year of each term of the multi-
 
16 year contract[; provided further that this].  This section shall
 
17 not apply to any contract under which the total amount to be paid
 
18 to the contractor cannot be accurately estimated at the time the
 
19 contract is to be awarded, or to any contract for which
 
20 consideration is in kind or forbearance[.], or to any contract
 
21 awarded pursuant to section 103D-306 that is a one-time payment
 
22 through a purchase order."
 
23      SECTION 16. Section 103D-703.5, Hawaii Revised Statutes, is
 

 
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 1 amended to read as follows:
 
 2      "[[]103D-703.5[]]  Settlement [on performance bonds.] of
 
 3 default by contractor.  Upon default of a contractor, the
 
 4 purchasing agency may accept moneys in satisfaction of the
 
 5 contractor's obligation on a contract whether such moneys are
 
 6 realized from the performance surety's obligation on its bond[.],
 
 7 an insurer's obligation on the contractor's policy, or any other
 
 8 source of moneys accepted as satisfaction of the contractor's
 
 9 default.  Such moneys shall be deemed to be trust moneys and
 
10 shall be deposited into a trust account with and under the
 
11 control of the purchasing agency.  These moneys and the interest
 
12 earned thereon shall be used for the completion of such contract.
 
13 Upon completion of the contract, any excess moneys shall be
 
14 deposited in the general fund unless otherwise restricted."
 
15      SECTION 17.  Section 103D-1001, Hawaii Revised Statutes, is
 
16 amended by adding four new definitions to be appropriately
 
17 inserted and to read as follows:
 
18      ""Direct labor" means all work required for preparation,
 
19 processing, or packing of goods or performance of services, but
 
20 not work relating to supervision, administration, inspection, or
 
21 shipping.
 
22      "Fair market price" means the price of a product or service
 
23 paid by a willing buyer to a willing seller, that is reasonably
 

 
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 1 comparable to prices on the open market.
 
 2      "Person with disabilities" means any person who is so
 
 3 severely incapacitated by any physical or mental disability that
 
 4 the person cannot engage in normal competitive employment because
 
 5 of the disability.
 
 6      "Public agency" means any agency of the State or county."
 
 7      SECTION 18.  Section 103D-1001.5, Hawaii Revised Statutes,
 
 8 is amended to read as follows:
 
 9      "[[]103D-1001.5[]]  Application of this part.  The
 
10 preferences in this part shall apply, when applicable, to
 
11 procurements made pursuant to [sections] section 103D-302 [and]
 
12 or 103D-303[.] or both."
 
13      SECTION 19.  Section 103D-1003, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "103D-1003  Printing, binding, and stationery work.(a)
 
16 All bids [or proposals] submitted under section 103D-302 for a
 
17 printing, binding, or stationery contract in which all work will
 
18 be performed in-state, including all preparatory work, presswork,
 
19 bindery work, and any other production-related work, to include
 
20 storage and shipping costs, shall receive a fifteen per cent
 
21 preference for purposes of bid [or proposal] evaluation.
 
22      (b)  Where bids [or proposals] are for work performed in-
 
23 state and out-of-state, then for the purpose of selecting the
 

 
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 1 lowest bid [or evaluating proposals] submitted only, the amount
 
 2 bid [or proposed] for work performed out-of-state shall be
 
 3 increased by fifteen per cent.  The lowest total [offer,] bid,
 
 4 taking the preference into consideration, shall be awarded the
 
 5 contract unless the solicitation provides for additional award
 
 6 criteria.  The contract amount awarded, however, shall be the
 
 7 amount of the price offered, exclusive of the preference."
 
 8      SECTION 20.  Section 103D-1007, Hawaii Revised Statutes, is
 
 9 amended by amending subsections (c) and (d) to read as follows:
 
10      "(c)  In any contract under section 103D-302 or 103D-303 for
 
11 a public works project, a state agency shall award the contract
 
12 to [a bidder] an offeror who has filed all state tax returns due
 
13 to the State and paid all amounts owing on such returns for two
 
14 successive years prior to submitting the [bid;] offer; provided
 
15 that the amount of that [bid] offer is not more than seven per
 
16 cent higher than the amount [bid] offered by any competing
 
17 contractor who has not filed or paid all applicable state taxes,
 
18 and the amount of the [bid] offer by the state tax paying
 
19 [bidder] offeror is $5,000,000 or less.
 
20      (d)  In any contract under section 103D-302 or 103D-303 for
 
21 a public works project, a state agency shall award the contract
 
22 to [a bidder] an offeror who has filed all state tax returns due
 
23 to the State and paid all amounts owing on such returns for four
 

 
Page 23                                                    1100
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 1 successive years prior to submitting the [bid;] offer; provided
 
 2 that the amount of that [bid] offer is not more than seven per
 
 3 cent higher than the amount [bid] offered by any competing
 
 4 contractor who has not filed or paid all applicable state taxes,
 
 5 and the amount of the [bid] offer by the state tax paying
 
 6 [bidder] offeror is more than $5,000,000."
 
 7      SECTION 21.  Section 103D-1207, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]103D-1207[]]  Annual inventory reporting by county
 
10 mayors to administrator of the state procurement office.  Each
 
11 county mayor, before September 16 of each year, shall prepare and
 
12 file with the administrator of the state procurement office an
 
13 annual inventory return of all nonexpendable state property in
 
14 the use, custody, or possession for the time being of the county
 
15 or any of its officers.  The annual inventory return shall
 
16 contain the following:
 
17      (1)  A summary and list by detailed item description and
 
18           carrying value of all nonexpendable state property on
 
19           hand as of July 1 of the year for which the return is
 
20           made;
 
21      (2)  A summary and list by detailed item description and
 
22           carrying value of all nonexpendable state property
 
23           disposed of during the year elapsed since the return
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

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

 
Page 25                                                    1100
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 1           which the return is made;
 
 2      (2)  A summary and list by detailed item description and
 
 3           carrying value of all nonexpendable county property
 
 4           acquired and disposed of during the year elapsed since
 
 5           the return made as of the preceding close of the fiscal
 
 6           year; and
 
 7      (3)  A sworn statement certifying the information on the
 
 8           return, property listings, and carrying values provided
 
 9           with the return to be full, true, and correct to the
 
10           best knowledge, information, and belief of the officer
 
11           making the return."
 
12      SECTION 23.  Section 128-10, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "128-10  Other powers.  The governor further, irrespective
 
15 of the existence of a civil defense emergency period, may:
 
16      (1)  Cooperate with the President and the heads of the armed
 
17           forces, and the civil defense agency of the United
 
18           States, and with the officers and agencies of other
 
19           states in matters pertaining to the civil defense of
 
20           the State and nation and the incidents thereof, and
 
21           take any measures which the governor may consider
 
22           proper to carry into effect any request of the
 
23           President or the appropriate federal officers and
 

 
Page 26                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           agencies, for any action looking to civil defense;
 
 2      (2)  Lease, lend, or otherwise furnish, on such terms and
 
 3           conditions as the governor may consider necessary to
 
 4           promote the public welfare and protect the interest of
 
 5           the State, any real or personal property of the state
 
 6           government or its political subdivisions, to the
 
 7           President, the heads of the armed forces, or to the
 
 8           civil defense agency of the United States;
 
 9      (3)  On behalf of the State enter into mutual aid agreements
 
10           or compacts with the federal government and with other
 
11           states.  The agreements or compacts shall be limited to
 
12           civil defense.  It may be provided in an interstate
 
13           compact, and the governor with the advice and consent
 
14           of the political subdivisions included within the scope
 
15           of the compact, may agree on behalf of the State that;
 
16           (A)  Each party state shall extend to the civil defense
 
17                forces of any other party state, while operating
 
18                within its state limits under the terms and
 
19                conditions of the compact, the same powers (except
 
20                that of arrest unless specifically authorized by
 
21                the receiving state), duties, rights, privileges,
 
22                and immunities as if they were performing their
 
23                duties in the state in which normally employed or
 

 
Page 27                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1                rendering services;
 
 2           (B)  Whenever any person holds a license, certificate,
 
 3                or other permit issued by any state evidencing the
 
 4                meeting of qualifications for professional,
 
 5                mechanical, or other skills, the person may render
 
 6                aid involving this skill in any party state to
 
 7                meet an emergency or disaster and the state shall
 
 8                give due recognition to such license, certificate,
 
 9                or other permit as if issued in the state in which
 
10                aid is rendered;
 
11           (C)  No party state or its officers or employees
 
12                rendering aid in another state pursuant to the
 
13                compact shall be liable on account of any act or
 
14                omission on the part of the forces while so
 
15                engaged, or on account of the maintenance or use
 
16                of any materials, equipment, goods, or facilities
 
17                in connection therewith;
 
18           (D)  As an alternative to paragraph (C), such other or
 
19                modified form of immunity as the governor may find
 
20                acceptable;
 
21           (E)  Each party state shall provide for the payment of
 
22                compensation and death benefits to injured members
 
23                of the civil defense forces of that state and the
 

 
Page 28                                                    1100
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 1                representatives of deceased members of the forces
 
 2                in case the members sustain injuries or are killed
 
 3                while rendering aid pursuant to the compact, in
 
 4                the same manner and on the same terms as if the
 
 5                injury or death were sustained within the state;
 
 6           (F)  Any party state rendering aid in another state
 
 7                pursuant to the compact shall be reimbursed by the
 
 8                party state receiving aid, or by the United States
 
 9                government under plans approved by it, for any
 
10                loss or damage to, or expense incurred in the
 
11                operation of any equipment answering a request for
 
12                aid, and for all costs incurred in connection with
 
13                requests for aid; provided that this paragraph
 
14                shall not be deemed to preclude the State, if it
 
15                is the aiding state, from assuming in whole or in
 
16                part the loss, damage, expense, or other cost, or
 
17                from loaning the equipment or donating the
 
18                services to the receiving party state without
 
19                charge or cost;
 
20           (G)  Any party state receiving evacuees shall be
 
21                reimbursed generally for the out-of-pocket
 
22                expenses incurred in receiving and caring for the
 
23                evacuees, for expenditures for transportation,
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1                food, clothing, medicines, and medical care, and
 
 2                like items; the expenditures shall be reimbursed
 
 3                by the party state of which the evacuees are
 
 4                residents, or by the United States government
 
 5                under plans approved by it; and
 
 6           (H)  In the event of an evacuation, the party state of
 
 7                which the evacuees are residents shall, after the
 
 8                termination of the emergency or disaster, assume
 
 9                the responsibility for the ultimate support or
 
10                repatriation of the evacuees;
 
11      (4)  Sponsor and develop mutual aid plans and agreements for
 
12           civil defense between the political subdivisions of the
 
13           State and between one or more political subdivisions
 
14           and other public or private agencies, for the
 
15           furnishing or exchange of food, clothing, medicine, and
 
16           other materials; engineering services, emergency
 
17           housing; police services; health, medical, and related
 
18           services; fire fighting, rescue, transportation, and
 
19           construction services and facilities; personnel
 
20           necessary to provide or conduct these services; and
 
21           such other materials, facilities, personnel, and
 
22           services as may be needed. The mutual aid plans and
 
23           agreements may be made with or without provisions for
 

 
Page 30                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           reimbursement of costs and expenses, and on such terms
 
 2           and conditions as are deemed necessary;
 
 3      (5)  Order and direct government agencies, officers, and
 
 4           employees, state or local, to take such action and
 
 5           employ such measures for law enforcement, medical,
 
 6           health, fire fighting, traffic control, warnings, and
 
 7           signals, engineering, rescue, construction, emergency
 
 8           housing, and other welfare, hospitalization,
 
 9           transportation, water supply, public information,
 
10           training, and other civil defense and emergency
 
11           functions as may be necessary, and utilize the
 
12           services, materials, and facilities of the agencies and
 
13           officers.  All such agencies and officers shall
 
14           cooperate with and extend their services, materials,
 
15           and facilities to the governor as the governor may
 
16           request;
 
17      (6)  Take possession of, use, manage, control, and
 
18           reallocate any public property, state or county, real
 
19           or personal, required by the governor for the purposes
 
20           of this chapter, including, without limitation,
 
21           airports, parks, playgrounds, and schools, and other
 
22           public buildings.  Whenever the property is so taken
 
23           the governor shall have power to make such provision
 

 
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 1           for the temporary accommodation of the government
 
 2           service affected thereby as the governor may deem
 
 3           advisable.  Like provisions may be made at any time
 
 4           whenever it is necessary to relocate any government
 
 5           service because of any emergency condition;
 
 6      (7)  Utilize all services, materials, and facilities of
 
 7           nongovernmental agencies, relief organizations,
 
 8           community associations, and other civil groups and
 
 9           private agencies that may be made available;
 
10      (8)  Receive, expend, or use contributions or grants in
 
11           money, property, or services, or loans of property, or
 
12           special contributions or grants in money, property, or
 
13           services, or loans of property, for special purposes
 
14           provided for by this chapter; establish funds in the
 
15           treasury for the deposit and expenditure of the moneys;
 
16           procure federal aid as the same may be available, and
 
17           apply the provisions of chapter 29 in cases of federal
 
18           aid even though not in the form of money.  The
 
19           contributions or grants are appropriated for the
 
20           purposes of this chapter, or for the special purposes;
 
21      (9)  Provide for the repair and maintenance of public
 
22           property, whenever adequate provision therefor is not
 
23           otherwise made; insure the property against any war
 

 
Page 32                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           risk, including without limitation damage or loss
 
 2           resulting from or arising out of an attack or action in
 
 3           resisting or combating an attack or apparent attack;
 
 4           provide for the restoration, renovation, replacement,
 
 5           or reconstruction of insured property in the event of
 
 6           damage or loss, and make temporary restoration of
 
 7           public utilities and other vital facilities in the
 
 8           event of an attack or other disaster;
 
 9     (10)  Purchase, make, produce, construct, rent, lease, or
 
10           procure by condemnation or otherwise, transport, store,
 
11           install, maintain, and insure, repair, renovate,
 
12           restore, replace, or reconstruct, and distribute,
 
13           furnish, or otherwise dispose of, with or without
 
14           charges therefor, materials and facilities for civil
 
15           defense and other emergency functions; procure federal
 
16           aid therefor whenever feasible; and take any measures
 
17           which may, in the governor's opinion, secure,
 
18           stimulate, or increase similar activities by private or
 
19           public persons or organizations.  Chapter 103D,
 
20           sections [103-49,] 103-50, 103-50.5, 103-53 [through
 
21           103-57], 103-55, 105-1 to 105-10, and 464-4 shall not
 
22           apply to any civil defense or other emergency functions
 
23           if and to the extent that the governor finds that the
 

 
Page 33                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           provisions, in whole or in part, impede or tend to
 
 2           impede the expeditious discharge of the functions, or
 
 3           that compliance therewith is impracticable due to
 
 4           existing conditions. In cases of extreme urgency during
 
 5           a civil defense emergency period the governor may
 
 6           suspend the penal provisions of sections 46-45 and 103-
 
 7           9, except those provisions that concern falsification;
 
 8     (11)  Appoint, employ, train, equip, and maintain, with
 
 9           compensation, or on a volunteer basis without
 
10           compensation and without regard to chapters 76, 77, and
 
11           79, part II of chapter 88 and section 78-1, such
 
12           agencies, officers, and other persons as the governor
 
13           deems necessary to carry out this chapter; determine to
 
14           what extent any law prohibiting the holding of more
 
15           than one office or employment applies to the agencies,
 
16           officers, and other persons; and subject to section
 
17           128-15, provide for and effect the interchange of
 
18           personnel, by detail, transfer, or otherwise, between
 
19           the State and any political subdivision, or among any
 
20           agencies or departments of the State;
 
21     (12)  Make charges in such cases and in such amounts as the
 
22           governor deems advisable, for any property sold, work
 
23           performed, services rendered, or accommodations or
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           facilities furnished by the government under this
 
 2           chapter; and make charges for licenses or permits to
 
 3           cover administrative expense connected therewith;
 
 4     (13)  Make such contracts as may be necessary to carry out
 
 5           this chapter;
 
 6     (14)  Establish special accounting forms and practices
 
 7           whenever necessary; and
 
 8     (15)  Take any and all steps necessary or appropriate to
 
 9           carry out the purposes of this chapter and to provide
 
10           for civil defense and other emergency functions.
 
11 The powers and authority conferred upon the governor by this
 
12 chapter are in addition to any other powers or authority
 
13 conferred upon the governor by the laws of the United States and
 
14 of the State for the same or a like purpose, and shall not be
 
15 construed as abrogating, limiting, or modifying any such powers,
 
16 or authority."
 
17      SECTION 24.  Section 128-13, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "128-13  Power and authority of local organizations.  Each
 
20 political subdivision shall have the power and authority:
 
21      (1)  Deputy director's staff.  To provide, for the deputy
 
22           director of such political subdivision, an assistant or
 
23           assistants whose appointment shall be approved by the
 

 
Page 35                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           director of civil defense, and such technical,
 
 2           clerical, stenographic, and other personnel, office
 
 3           space, furniture, equipment, supplies, and funds as may
 
 4           be necessary to carry out the purposes of this chapter.
 
 5           Chapter 76 shall apply to the full-time deputy director
 
 6           or the deputy director's first assistant.
 
 7      (2)  Appropriations, etc. To make appropriations and
 
 8           authorize expenditures for the purposes of this
 
 9           chapter, including the power to place under the control
 
10           of the governor, for expenditure as matching funds for
 
11           federal aid, or for any purpose within the powers of
 
12           the governor, moneys appropriated by it; to make
 
13           appropriations and authorize expenditures for the
 
14           purposes of this chapter out of the normal revenues or
 
15           fund balances or surpluses of the political
 
16           subdivision, notwithstanding any legal restrictions
 
17           upon the purposes for which the funds may be expended,
 
18           except[,] that pension and retirement funds, funds set
 
19           aside for the redemption of bonds or the payment of
 
20           interest thereon, trust funds, loan funds, and funds
 
21           received from the federal government or from any person
 
22           for specific purposes shall not be affected.
 
23      (3)  Procurement, etc. To purchase, make, produce,
 

 
Page 36                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           construct, rent, lease, or procure by condemnation, or
 
 2           otherwise, transport, store, install, maintain, and
 
 3           insure, repair, renovate, restore, replace or
 
 4           reconstruct, and distribute, furnish or otherwise
 
 5           dispose of, with or without charges, materials and
 
 6           facilities for civil defense; and to procure federal
 
 7           aid therefor whenever feasible.  Chapter 103D, sections
 
 8           [103-41 to 103-57,] 103-50, 103-50.5, 103-53, 103-55,
 
 9           105-1 to 105-10, and 464-4 shall not apply to any civil
 
10           defense functions of and to the extent that the mayor
 
11           finds that the provisions, in whole or in part, impede
 
12           or tend to impede the expeditious discharge of the
 
13           functions, or that compliance therewith is
 
14           impracticable due to existing conditions.
 
15      (4)  Personnel.  To provide for the appointment, employment,
 
16           training, equipping, and maintaining, with
 
17           compensation, or on a volunteer basis without
 
18           compensation and without regard to chapters 76, 77, 79,
 
19           and 88 and section 78-1, of such agencies, officers,
 
20           and other persons as it deems necessary to carry out
 
21           this chapter; to determine to what extent any law
 
22           prohibiting the holding of more than one office or
 
23           employment applies to the agencies, officers, and other
 

 
Page 37                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           persons; and subject to section 128-15, to provide for
 
 2           the interchange of personnel, by detail, transfer or
 
 3           otherwise, between agencies or departments of the
 
 4           political subdivision, or between political
 
 5           subdivisions.
 
 6      (5)  Contributions.  To receive, expend, or use
 
 7           contributions or grants in money, property, or
 
 8           services, or loans of property, or special
 
 9           contributions or grants in money, property, or
 
10           services, or loans of property, for special purposes
 
11           provided for by this chapter.
 
12      (6)  Charges.  To make charges in such cases and in such
 
13           amounts as it deems advisable, for any property sold,
 
14           work performed, services rendered, or accommodations or
 
15           facilities furnished by the political subdivision under
 
16           this chapter.
 
17      (7)  Contracts.  To make or authorize such contracts as may
 
18           be necessary to carry out this chapter.
 
19      (8)  Mutual aid plans. To participate in and carry out
 
20           mutual aid plans and agreements or compacts, sponsored
 
21           or developed by the state civil defense agency.
 
22      (9)  Continuity of government.  To insure continuity of
 
23           government during a civil defense emergency period, the
 

 
Page 38                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           legislative body of a county may by ordinance, unless
 
 2           otherwise provided by law, provide the procedure for
 
 3           the appointment and designation of stand-by officers
 
 4           for the legislative body and the elected chief
 
 5           executive of the county for the emergency period, who
 
 6           shall serve in the event of the unavailability of the
 
 7           officers for whom they stand by."
 
 8      SECTION 25.  Section 382-3, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "382-3  Government operations.  After the issuance of a
 
11 proclamation pursuant to section 382-2 and during the emergency
 
12 thereby proclaimed, the governor may seize and take possession of
 
13 and operate the entire plant and facilities, including related
 
14 facilities, of any stevedoring company whose operations are
 
15 suspended or substantially reduced, or so much thereof, or such
 
16 interest therein, as the governor may deem necessary in order to
 
17 carry out the purposes of this chapter.
 
18      Such government operations may be conducted by the governor
 
19 through such department or agency of the State as the governor
 
20 may designate and the governor may delegate to such agency such
 
21 of the governor's powers as are necessary to conduct the
 
22 operations.
 
23      The governor shall have such power and authority as shall be
 

 
Page 39                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 reasonably necessary to conduct such government operations in a
 
 2 manner consistent with the public health, safety, and welfare,
 
 3 including, without limitation upon the generality of the
 
 4 foregoing, the power to make such contracts and arrangements with
 
 5 ship owners, charterers, agents, and operators, wharf and pier
 
 6 owners and operators, stevedoring companies, trucking operators,
 
 7 warehouse workers and other persons as may be required in order
 
 8 to provide stevedoring services and related services.  The
 
 9 governor may make contracts without regard to chapter 103D and
 
10 sections [103-41 to 103-57] 103-50, 103-50.5, 103-53, and 103-55
 
11 and, specifically, the certificate of the comptroller as to the
 
12 availability of an unexpended appropriation or balance of an
 
13 appropriation to cover the amount required by any such contract
 
14 shall not be required."
 
15      SECTION 26.  Section 103-15, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["103-15  Contract provisions to consider traffic.(a)
 
18 Unless otherwise prohibited by law, all public contracts awarded
 
19 under this chapter shall consider the extent to which the work
 
20 undertaken pursuant to the contract will increase traffic
 
21 congestion.  The contract shall contain provisions to reasonably
 
22 minimize any adverse impact.
 
23      (b)  The feasibility of off-hour construction shall be
 

 
Page 40                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 considered for all public contracts that result in significant
 
 2 traffic congestion or delay during the term of the contract.
 
 3      (c)  As used in this section, "off-hour construction" means
 
 4 construction performed between the hours of six o'clock p.m. and
 
 5 six o'clock a.m."]
 
 6      SECTION 27.  Section 103-21, Hawaii Revised Statutes, is
 
 7 repealed.
 
 8      ["103-21  Officer defined.  The term "procurement officer"
 
 9 as used in chapter 103D with respect to contracts entered into by
 
10 a county or a board, bureau, or commission thereof authorized to
 
11 contract in its own behalf, means the council of the county or
 
12 the governing body of such board, bureau, or commission as
 
13 constituted by law, or such officer as is authorized by the
 
14 county council or the board, bureau, or commission to act as its
 
15 contracting officer."]
 
16      SECTION 28.  Section 103-22.1, Hawaii Revised Statutes, is
 
17 repealed.
 
18      ["103-22.1  Services of the handicapped.  When a
 
19 governmental agency contracts for or purchases services, five per
 
20 cent preference shall be given to services to be performed by
 
21 nonprofit corporations or public agencies operating sheltered
 
22 workshops servicing the handicapped in conformance with criteria
 
23 established by the department of labor and industrial relations
 

 
Page 41                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 pursuant to chapter 91; provided that service contracts awarded
 
 2 under this section shall be exempt from the wages provision of
 
 3 section 103-55.  The state comptroller shall adopt rules under
 
 4 chapter 91 to establish the preference for the services to be
 
 5 performed by nonprofit corporations or public agencies operating
 
 6 sheltered workshops consistent with this section."]
 
 7      SECTION 29.  Section 103-24.6, Hawaii Revised Statutes, is
 
 8 repealed.
 
 9      ["103-24.6  Indigenous and Polynesian introduced plants;
 
10 use in public landscaping.(a)  Wherever and whenever feasible,
 
11 all plans, designs, and specifications for new or renovated
 
12 landscaping of any building, complex of buildings, facility,
 
13 complex of facilities, or housing developed by the State with
 
14 public moneys shall incorporate indigenous land plant species, as
 
15 defined in section 195D-2, and plant species brought to Hawaii by
 
16 Polynesians before European contact, such as the kukui, noni, and
 
17 coconut; provided that suitable cultivated plants can be made
 
18 available for this purpose without jeopardizing wild plants in
 
19 their natural habitat; and provided further that wherever and
 
20 whenever possible, indigenous land plants shall be used for
 
21 landscaping on the island or islands on which the species
 
22 originated.
 
23      (b)  Each plant or group of plants used pursuant to
 

 
Page 42                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 subsection (a) shall be clearly identified with signs for the
 
 2 edification of the general public.
 
 3      (c)  The policy board shall adopt rules pursuant to chapter
 
 4 91 to carry out the purposes of this section."]
 
 5      SECTION 30.  Section 103-49, Hawaii Revised Statutes, is
 
 6 repealed.
 
 7      ["103-49  Value engineering clauses; rules.  The State and
 
 8 each of the respective counties shall insert clauses providing
 
 9 for value engineering incentives in all public works contracts
 
10 for amounts in excess of $100,000.  The clauses shall provide:
 
11      (1)  That cost reduction proposals submitted by contractors:
 
12           (A)  Must require, in order to be applied to the
 
13                contract, a change order thereto; and
 
14           (B)  Must result in savings to the State or county, as
 
15                the case may be, by providing less costly items
 
16                than those specified in the contract without
 
17                impairing any of their essential functions and
 
18                characteristics such as service life, reliability,
 
19                economy of operation, ease of maintenance, and
 
20                necessary standardized features.
 
21      (2)  That accepted cost reduction proposals shall result in
 
22           an equitable adjustment of the contract price so that
 
23           the contractor will share a portion of the realized
 

 
Page 43                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           cost reduction.
 
 2      The policy office shall adopt, pursuant to chapter 91, such
 
 3 rules as may be necessary and proper to implement this section,
 
 4 provide adequate incentives to contractors, realize savings for
 
 5 the State or counties, and to otherwise carry out the purposes of
 
 6 this section."]
 
 7      SECTION 31.  Section 103-53.5, Hawaii Revised Statutes, is
 
 8 repealed.
 
 9      ["103-53.5  Tax adjustment for out-of-state vendors and
 
10 tax-exempt bidders.  Where the bidder or vendor is an out-of-
 
11 state vendor not doing business in the State or is a person
 
12 exempted from paying the applicable general excise tax, the
 
13 package bid or purchase price, for the purpose of determining the
 
14 lowest price bid, shall be increased by the applicable retail
 
15 rate of general excise tax and the applicable use tax. The lowest
 
16 responsible bidder, taking into consideration the above
 
17 increases, shall be awarded the contract, but the contract amount
 
18 of any contract awarded shall not include the amount of the
 
19 increases."]
 
20      SECTION 32.  Section 103-54, Hawaii Revised Statutes, is
 
21 repealed.
 
22      ["103-54  Wages of certain laborers paid weekly; penalty.
 
23 All contracts executed pursuant to this chapter involving the
 

 
Page 44                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 employment of laborers shall provide for weekly payment of wages
 
 2 to all laborers whose rate of compensation is $5 or less per day.
 
 3 Every laborer employed by the contractor or any subcontractor
 
 4 under any such contract whose rate of compensation is $5 or less
 
 5 per day shall be paid the laborer's wages weekly by the laborer's
 
 6 employer, whether or not the requirement is set forth in the
 
 7 contract.  Every contractor or subcontractor who violates this
 
 8 section shall be fined not more than $500."]
 
 9      SECTION 33.  Section 103-56, Hawaii Revised Statutes, is
 
10 repealed.
 
11      ["103-56  Pay days.  Except as provided in section 103-54
 
12 the fifteenth and last days in each month shall be the pay days
 
13 of all employees engaged in constructing or repairing roads,
 
14 bridges, or streets for the State."]
 
15      SECTION 34.  Section 103-57, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["103-57  Only citizens employed, exception.  No person
 
18 shall be employed as a mechanic or laborer upon any public work
 
19 carried on by the State or by any political subdivision thereof,
 
20 whether the work is done by contract or otherwise, unless the
 
21 person is a citizen of the United States and of the State or
 
22 eligible to become such a citizen; provided that in cases where
 
23 it is not reasonably practicable to obtain competent persons with
 

 
Page 45                                                    1100
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 the foregoing qualifications, persons without such qualifications
 
 2 may, with the approval of the governor where the compensation for
 
 3 such employment is paid out of state funds, or with the approval
 
 4 of the mayor where the compensation for such employment is paid
 
 5 out of county funds or out of funds under the control of any
 
 6 county board, bureau, or commission, be employed until persons
 
 7 with such qualifications competent for such services can be
 
 8 obtained."]
 
 9      SECTION 35.  Section 103-58, Hawaii Revised Statutes, is
 
10 repealed.
 
11      ["103-58  Officers, etc., forbidden interest in government
 
12 contracts.  No officer or head of any department of the State or
 
13 of any political or municipal subdivision thereof having the
 
14 power to make or award a contract on the part of the government
 
15 shall, on behalf of the State or of such subdivision thereof
 
16 under which he may be elected or appointed, as the case may be,
 
17 make, or award, or participate in the awarding of a contract to
 
18 himself or to any partnership or corporation in which he is a
 
19 member or stockholder when the contract involves the expenditure
 
20 of government funds in excess of $50.
 
21      Nor shall any officer or head of any department of the State
 
22 or any subdivision thereof before or after award of contracts,
 
23 gain an interest as subcontractor or otherwise for which he shall
 

 
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 1 receive a consideration of over $50 in any contract which he has
 
 2 made or awarded or participated in the making or awarding of, on
 
 3 behalf of the State or on behalf of any subdivision thereof under
 
 4 which he may be elected or appointed, as the case may be.  This
 
 5 section shall not apply (1) if the contract is made with a
 
 6 corporation in which the officer of the State or any subdivision
 
 7 thereof has the ownership of not more than five per cent of the
 
 8 capital stock if it be a corporation or joint stock company; (2)
 
 9 if any contract made by the State or any subdivision thereof is
 
10 awarded to the lowest responsible bidder after advertisement for
 
11 sealed tenders according to law in cases where the sum to be
 
12 expended is $1,000 or more; or (3) if any contract is awarded to
 
13 the lowest responsible bidder when requests of the same character
 
14 have been made to the principal dealers, contractors, persons,
 
15 partnerships, or corporations doing such work or selling such
 
16 commodities for sealed tenders for the same in cases where the
 
17 sum to be expended is more than $50 and less than $100."]
 
18      SECTION 36.  Section 103-59, Hawaii Revised Statutes, is
 
19 repealed.
 
20      ["103-59  Violation voids contract.  A violation of section
 
21 103-58 shall render the contract or agreement in respect of which
 
22 such violation occurs void."]
 
23      SECTION 37.  Section 103-60, Hawaii Revised Statutes, is
 

 
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 1 repealed.
 
 2      ["103-60  Penalty.  Any person who violates section 103-58
 
 3 shall be fined not more than $1,000 or imprisoned not more than
 
 4 one year, or both."]
 
 5      SECTION 38.  Section 103-71, Hawaii Revised Statutes, is
 
 6 repealed.
 
 7      ["[103-71]  Energy efficiency through life-cycling costing.
 
 8 (a)  The procurement practices of the State and its counties
 
 9 shall include energy efficiency standards and policies, including
 
10 life-cycle costing.  These shall be developed and introduced into
 
11 procurement procedures by July 1, 1978.
 
12      (b)  In implementing life-cycle costing, the purchasing
 
13 agent shall be guided by energy efficiency standards and policies
 
14 for purchasing various items developed and promulgated by the
 
15 United States Department of Energy and other federal agencies,
 
16 and by nationally recognized trade associations, including but
 
17 not limited to the Institute of Government Purchasing Agents, the
 
18 Purchasing Management Association, and the Air Conditioning and
 
19 Refrigeration Institute.  The purchasing agent shall notify
 
20 bidders of information, procedures and forms required in
 
21 implementing energy efficiency standards and policies.  The
 
22 information required shall include purchasing standards and
 
23 policies developed by federal agencies and by nationally
 

 
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 1 recognized agencies and associations, as well as energy
 
 2 consumption and life-cycle cost data.
 
 3      (c)  The purchaser shall consider purchasing via the life-
 
 4 cycle costing method those classes of items for which nationally
 
 5 recognized energy efficiency data have been developed.  These
 
 6 items shall include but not be limited to automobiles and air
 
 7 conditioning systems.  The watt-saving variety of common-sized
 
 8 fluorescent lamps shall be purchased except where standard
 
 9 wattage of such lamps is specifically required by the using
 
10 agency."]
 
11      SECTION 39.  Parts III and V of chapter 103, Hawaii Revised
 
12 Statutes, are repealed.
 
13      SECTION 40.  Statutory material to be repealed is bracketed.
 
14 New statutory material is underscored.
 
15      SECTION 41.  This Act shall take effect on July 1, 1999.