Prohibits the State from contracting with foreign entities that
have been convicted of, or pleaded nolo contendere to, any crime
involving an act of fraud or dishonesty, including bribery or bid
rigging, in any jurisdiction of the United States.  Voids such
contracts based on the foreign person's misrepresentation.

THE SENATE                              S.B. NO.           1581
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that the State and
 2 counties should not enter into contracts with foreign
 3 corporations, individuals, partnerships, or other foreign
 4 entities that have a record of bribery, bid rigging, or other
 5 crimes evidencing fraud, dishonesty, or corruption.  While as a
 6 practical matter it may be difficult to ascertain whether a
 7 foreign entity has been convicted of any of these crimes, this
 8 Act voids any such contract for goods or services entered into
 9 between the foreign person and a governmental body of the State
10 or a county where the foreign person has wilfully misrepresented
11 or omitted a material fact regarding such a crime in a request
12 for proposals or invitation for bids.
13      SECTION 2.  Chapter 103D, Hawaii Revised Statutes, is
14 amended by adding a new section to be appropriately designated
15 and to read as follows:
16      "103D-    Contracts with foreign persons.  (a)
17 Notwithstanding any law to the contrary, no governmental body
18 shall enter into a contract for the procurement or disposal of
19 goods or services, including professional services or
20 construction, with any foreign person, where that foreign person,

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                                     S.B. NO.           1581

 1 or the director, officer, responsible managing employee, or other
 2 controlling person of that foreign person has:
 3      (1)  Been convicted of, or pleaded nolo contendere to, any
 4           crime involving an act of fraud or dishonesty,
 5           including but not limited to bribery or bid rigging, in
 6           any jurisdiction of the United States or its
 7           territories or possessions; or
 8      (2)  Wilfully made or caused to be made in any response to a
 9           request for proposals or an invitation for bids any
10           statement which, at the time and in the light of the
11           circumstances under which it was made, was false or
12           misleading with respect to any material fact regarding
13           a crime specified under paragraph (1), or has wilfully
14           omitted to state in the response to the request for
15           proposals or invitation for bids any material fact
16           regarding a crime specified under paragraph (1).
17      (b)  Any contract entered into between a governmental body
18 and a foreign person in violation of subsection (a) shall be
19 deemed to be void as against public policy from its inception.
20 In any action for damages arising out of a contract deemed to be
21 void under this subsection, the court shall award all attorney's
22 fees and court costs to the governmental body as appropriate.

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                                     S.B. NO.           1581

 1      (c)  As used in this section, "foreign person" has the same
 2 meaning as defined in section 241-3.5(8)."
 3      SECTION 3.  Any existing contracts, agreements, or other
 4 arrangements containing provisions that are not in compliance
 5 with this Act shall be void on the effective date of this Act as
 6 to those provisions, except as to any provisions that may be
 7 required to be extended beyond that date in order to comply with
 8 any applicable federal laws or orders.  Nothing in this section
 9 shall preclude payment to any contractor or licensee for services
10 actually and properly performed under the contract prior to the
11 date of its becoming void.
12      SECTION 4.  It is the intent of this Act not to jeopardize
13 the receipt of any federal aid nor to impair the obligation of
14 the State or any agency thereof to the holders of any bond issued
15 by the State or by any such agency, and to the extent, and only
16 to the extent, necessary to effectuate this intent, the governor
17 may modify the strict provisions of this Act, but shall promptly
18 report any such modification with reasons therefor to the
19 legislature at its next session thereafter for review by the
20 legislature.
21      SECTION 5.  New statutory material is underscored.
22      SECTION 6.  This Act shall take effect on July 1, 1999.
24                           INTRODUCED BY:  _______________________