Procurement; Local Agricultural Products
Requires state agencies to purchase locally grown agricultural products under certain circumstances. Allows purchasing agencies to parcel purchases in situations where a local producer is unable to supply an entire order. Establishes a new category of "Hawaii product" to include food products entirely produced in Hawaii. Establishes a 15% price preference buffer for food products entirely produced in Hawaii.
TWENTY-SECOND LEGISLATURE, 2004
STATE OF HAWAII
A BILL FOR AN ACT
relating to procurement.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to part X to be appropriately designated and to read as follows:
"§103D- Local agricultural products. (a) Notwithstanding any other provision of law to the contrary, a purchasing agency shall only purchase agricultural products that are grown, produced, raised, or manufactured in the State.
(b) Subsection (a) shall not apply when:
(1) The product to be procured is not grown, produced, raised, or manufactured in the State for commercial sale;
(2) The quantity needed exceeds local suppliers' ability to provide the product; provided that a purchasing agency may structure a purchase order to enable a local supplier to fulfill as much of the total purchase order as the local supplier is able to provide, prior to obtaining the balance of the needed product from out-of-state;
(3) The local supplier's price for the product exceeds the price for the product charged by an out-of-state supplier after it is adjusted pursuant to the formula established under section 103D-1002; and
(4) The amount of the product to be procured falls below a minimum threshold set by rules adopted by the procurement policy board pursuant to chapter 91.
The procurement policy board shall adopt rules, under chapter 91, as may be necessary to effectuate the purposes of this section."
SECTION 2. Section 103D-1001, Hawaii Revised Statutes, is amended by amending the definition of "Hawaii products" to read as follows:
""Hawaii products" means products that are mined, excavated, produced, manufactured, raised, or grown in the State where the input constitutes no less than twenty-five per cent of the manufactured cost; provided that:
(1) Where the value of the input constitutes twenty-five per cent or more, but less than fifty per cent, of the manufactured cost, the product shall be classified as class I;
(2) Where the value of the input constitutes fifty per cent or more, but less than seventy-five per cent, of the manufactured cost, the product shall be classified as class II; [
(3) Where the value of the input constitutes seventy-five per cent or more of the manufactured cost, the product shall be classified as class III[
(4) Where an agricultural or food product is either entirely grown in the State or produced or processed in the State out of one hundred per cent Hawaii grown products, the product shall be classified as class IV."
SECTION 3. Section 103D-1002, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) A purchasing agency shall review all specifications in a bid or proposal for purchase from the Hawaii products list where these products are available; provided that the products:
(1) Meet the minimum specifications and the selling price f.o.b. jobsite;
(2) Unloaded including applicable general excise tax and use tax does not exceed the lowest delivered price in Hawaii f.o.b. jobsite; and
(3) Unloaded, including applicable general excise tax and use tax, does not exceed the lowest delivered price of a similar non-Hawaii product by more than:
(A) Three per cent where class I Hawaii products are involved;
(B) Five per cent where class II Hawaii products are involved; [
(C) Ten per cent where class III Hawaii products are involved[
(D) Fifteen per cent where class IV Hawaii products are involved."
SECTION 4. The state procurement administrator shall submit a report to the legislature not later than twenty days prior to the convening of the 2005 regular session on the actions taken to comply with this Act.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.