Report Title:

OHA, Grants and Award, Exempt from Procurement Law


Allows OHA to procure goods, services, and construction without compliance with chapter 103D or 103F.


S.B. NO.












SECTION 1. The legislature finds that since the enactment of Act 196, Session Laws of Hawaii 1979, the office of Hawaiian affairs has been making grants pursuant to its legal authority codified in chapter 10, Hawaii Revised Statutes.

The purpose of this Act is to clarify the authority of the office of Hawaiian affairs to:

(1) Continue to award administrative agency grants and subsidies pursuant to its enabling legislation;

(2) Establish sufficient descriptions, qualifications and standards for the office of Hawaiian affairs for awarding, disbursing, monitoring and evaluating administrative agency grants, subsidies, and board initiatives to organizations, businesses and individuals; and

(3) Exempt the office from the public procurement laws when grants, subsidies and board initiatives are awarded from income, revenues, and proceeds irrespective of its source or originating wholly from the pro rata portion of all funds derived from the public land trust.

SECTION 2. Section 10-5, Hawaii Revised Statutes, is amended to read as follows:

"10-5 Board of trustees; powers and duties. The board shall have the power in accordance with law to:

(1) Manage, invest, and administer the proceeds from the sale or other disposition of lands, natural resources, minerals, and income derived from whatever sources for native Hawaiians and Hawaiians, including all moneys received by the office equivalent to that pro rata portion of the revenue derived from the public land trust referred to in section 10-2;

(2) Exercise control over real and personal property set aside to the office by the State of Hawaii, the United States of America, or any private sources, and transferred to the office for native Hawaiians and Hawaiians; provided that all of the properties acquired by the office shall be controlled and managed for the purposes of this chapter, subject to any limitations of the trust provisions established by article XII, sections 5 and 6, of the state Constitution;

(3) Collect, receive, deposit, withdraw, and invest money and property on behalf of the office;

(4) Formulate policy relating to the affairs of native Hawaiians and Hawaiians, provided that such policy shall not diminish or limit the benefits of native Hawaiians under article XII, section 4, of the state Constitution;

(5) Otherwise act as a trustee as provided by law;

(6) Delegate to the administrator, its officers and employees such powers and duties as may be proper for the performance of the powers and duties vested in the board;

(7) Provide grants to public or private agencies for pilot projects, demonstrations, or both, where those projects or demonstrations fulfill criteria established by the board;

(8) Make available technical and financial assistance and advisory services to any agency or private organization for native Hawaiian and Hawaiian programs, and for other functions pertinent to the purposes of the office of Hawaiian affairs. Financial assistance may be rendered through contractual arrangements as may be agreed upon by the board and any such agency or organization; [and]

(9) Adopt and use a common seal by which all official acts shall be authenticated[.]; and

(10) Procure goods, services, and construction, utilizing internal policies and procedures developed by the board and consistent with the goals of public accountability and public procurement practices, but not subject to chapter 103D. Where possible, the board is encouraged to follow the provisions of chapter 103D; provided that the use of one or more provisions of chapter 103D shall not constitute a waiver of the exemption of chapter 103D and shall not subject the board to any other provision of chapter 103D; and

(11) Enter into health and human services agreements without regard to chapter 103F when such agreements are made pursuant to this chapter."

SECTION 3. Section 103D-102, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Notwithstanding subsection (a), this chapter shall not apply to contracts by governmental bodies:

(1) Solicited or entered into before July 1, 1994, unless the parties agree to its application to a contract solicited or entered into prior to July 1, 1994;

(2) To disburse funds, irrespective of their source:

(A) For grants or subsidies as those terms are defined in section 42F-101, made by the State in accordance with standards provided by law as required by article VII, section 4, of the State Constitution; or by the counties pursuant to their respective charters or ordinances;

(B) To make payments to or on behalf of public officers and employees for salaries, fringe benefits, professional fees, or reimbursements;

(C) To satisfy obligations that the State is required to pay by law, including paying fees, permanent settlements, subsidies, or other claims, making refunds, and returning funds held by the State as trustee, custodian, or bailee;

(D) For entitlement programs, including public assistance, unemployment, and workers' compensation programs, established by state or federal law;

(E) For dues and fees of organizations of which the State or its officers and employees are members, including the National Association of Governors, the National Association of State and County Governments, and the Multi-State Tax Commission;

(F) For deposit, investment, or safekeeping, including expenses related to their deposit, investment, or safekeeping;

(G) To governmental bodies of the State;

(H) As loans, under loan programs administered by a governmental body; [and]

(I) For contracts awarded in accordance with the provisions of chapter 103F; and

(J) For contracts, grants, and financial assistance awarded by the office of Hawaiian affairs pursuant to chapter 10, including sections 10-4(4), 10-5(7), and 10-5(8);

(3) To procure goods, services, or construction from a governmental body other than the University of Hawaii bookstores, from the federal government, or from another state or its political subdivision;

(4) To procure the following goods or services which are available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State:

(A) Services of expert witnesses for potential and actual litigation of legal matters involving the State, its agencies, and its officers and employees, including administrative quasi-judicial proceedings;

(B) Works of art for museum or public display;

(C) Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, magnetic, or electronic form;

(D) Meats and foodstuffs for the Kalaupapa settlement;

(E) Opponents for athletic contests;

(F) Utility services whose rates or prices are fixed by regulatory processes or agencies;

(G) Performances, including entertainment, speeches, and cultural and artistic presentations;

(H) Goods and services for commercial resale by the State;

(I) Services of printers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State's or counties' bonds;

(J) Services of attorneys employed or retained to advise, represent, or provide any other legal service to the State or any of its agencies, on matters arising under laws of another state or foreign country, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services are expected to be performed outside this State;

(K) Financing agreements under chapter 37D; and

(L) Any other goods or services which the policy board determines by rules or the chief procurement officer determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State; and

(5) Which are specific procurements expressly exempt from any or all of the requirements of this chapter by:

(A) References in state or federal law to provisions of this chapter or a section of this chapter, or references to a particular requirement of this chapter; and

(B) Trade agreements, including the Uruguay Round General Agreement on Tariffs and Trade (GATT) which require certain non-construction and non-software development procurements by the comptroller to be conducted in accordance with its terms."

SECTION 4. Section 103F-101, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) This chapter shall apply to all contracts made by state agencies to provide health or human services to Hawaii's residents, provided that this chapter shall not apply to:

(1) Contracts to award grants or subsidies of state funds appropriated by the legislature to a specific organization or individual;

(2) Transactions between or among government agencies, including but not limited to agreements, contracts, and grants;

(3) Transactions expressly exempt from the requirements of this chapter; [and]

(4) Transactions that the chief procurement officer determines are exempt under rules adopted by the policy board[.]; and

(5) Contracts, grants, and financial assistance awarded by the office of Hawaiian affairs pursuant to chapter 10, including sections 10-4(4), 10-5(7) and 10-5(8)."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6 This Act shall take effect on July 1, 2002.