REPORT TITLE:
Procurement

DESCRIPTION:
Eliminates administrator of the State procurement office and
transfers duties to policy office; amends various provisions of
the Hawaii public procurement code to consolidate and clarify
sections in the chapter; amends or repeals related sections of
the HRS to bring them into compliance with the code; deletes
handicapped preference for construction contracts; eliminates the
requirement that after fifty per cent of contract is complete,
retainage may not be withheld. (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        985
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 1
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      §103D-    Preference for qualified community rehabilitation
 
 7 programs.  When a governmental agency contracts for purchases of
 
 8 services, a five per cent preference shall be given to services
 
 9 to be provided by nonprofit corporations or public agencies
 
10 operating qualified community rehabilitation programs in
 
11 conformance with criteria established by the department of labor
 
12 and industrial relations pursuant to chapter 91; provided that
 
13 contracts awarded under this section shall be exempt from the
 
14 wages provision of section 103-55.  The policy board shall adopt
 
15 rules under chapter 91 to establish the preference for nonprofit
 
16 corporations or public agencies operating qualified community
 
17 rehabilitation programs consistent with this section.
 
18      §103D-    Purchases from qualified community rehabilitation
 
19 programs.  (a)  Any public agency, without advertising or calling
 
20 for bids, may purchase goods or services provided by qualified
 
21 community rehabilitation programs serving persons with
 
22 disabilities that have indicated an interest in supplying the
 
23 goods or services and on an equitable basis may apportion the
 

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

 
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 1      (3)  Ensure that any good or service purchased from a
 
 2           qualified community rehabilitation program shall not be
 
 3           placed on the Hawaii products list under section 103D-
 
 4           1002.
 
 5      (c)  Notwithstanding any other law to the contrary, this
 
 6 section shall not apply to the procurement of construction, as
 
 7 defined in 103D-104.
 
 8      §103D-    Qualified community rehabilitation program;
 
 9 proposal to provide goods or services.  A qualified community
 
10 rehabilitation program interested in selling goods or services to
 
11 a public agency shall submit a proposal to the agency containing
 
12 the following information:
 
13      (1)  A description of the good or service;
 
14      (2)  The price of the good or service; and
 
15      (3)  Documents and information necessary to qualify as a
 
16           qualified community rehabilitation program under
 
17           section 103D-1001.
 
18      Notwithstanding any other law to the contrary, this section
 
19 shall not apply to the procurement of construction, as defined in
 
20 103D-104."
 
21      SECTION 4.  Chapter 103, Hawaii Revised Statutes, is amended
 
22 by amending the title to read as follows:
 
23                           "CHAPTER 103
 

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

 
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 1      "[[]§103-32.2[]]  Substitution of retainage.  Any other law
 
 2 to the contrary notwithstanding, any public contract [issued
 
 3 under this chapter] may provide that the [contracting]
 
 4 procurement officer may enter into an agreement with the
 
 5 contractor which will allow the contractor to withdraw from time
 
 6 to time the whole or any portion of the sum retained under
 
 7 section 103-32.1 upon depositing with the [contracting]
 
 8 procurement officer any general obligation bond of the State or
 
 9 its political subdivisions with a market value not less than the
 
10 sum to be withdrawn; provided that the [contracting] procurement
 
11 officer may require that the total market value of such bond be
 
12 greater than the sum to be withdrawn."
 
13      SECTION 7.  Section 103-39.5, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]§103-39.5[]]  Construction, renovation, or repair of
 
16 school facilities; county permit exemption.  Any [contracts under
 
17 this chapter] public works contract for the construction,
 
18 renovation, or repair of public school facilities shall be exempt
 
19 from any requirement of a county that related off-site
 
20 improvements be made by the contracting government agency as a
 
21 condition to the issuance of any permit."
 
22      SECTION 8.  Section 103-50, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

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

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

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

 
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 1 students, including the visually [handicapped,] impaired, unable
 
 2 to use the material in conventional print and form.  Such right
 
 3 shall include the right to make those corrections, revisions, and
 
 4 other modifications as may be necessary."
 
 5      SECTION 12.  Section 103D-102, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "§103D-102  Application of this chapter.  (a)  This chapter
 
 8 shall apply to all procurement contracts made by governmental
 
 9 bodies whether the consideration for the contract is cash,
 
10 revenues, realizations, receipts, or earnings, any of which the
 
11 State receives or is owed; in-kind benefits; or forbearance;
 
12 provided that nothing in this chapter or rules adopted hereunder
 
13 shall prevent any governmental body from complying with the terms
 
14 and conditions of any other grant, gift, bequest, or cooperative
 
15 agreement.
 
16      (b)  Notwithstanding subsection (a), this chapter shall not
 
17 apply to contracts by governmental bodies:
 
18      (1)  Solicited or entered into before July 1, 1994, unless
 
19           the parties agree to its application to a contract
 
20           solicited or entered into prior to July 1, 1994;
 
21      (2)  To disburse funds, irrespective of their source:
 
22           (A)  For grants, subsidies, or purchases of services as
 
23                those terms are defined in [section 42D-1,]
 

 
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 1                chapters 42F and 103F, made in accordance with
 
 2                standards provided by law as required by article
 
 3                VII, section 4, of the State Constitution; or by
 
 4                the counties pursuant to their respective charters
 
 5                or ordinances;
 
 6           (B)  To make payments to or on behalf of public
 
 7                officers and employees for salaries, fringe
 
 8                benefits, professional fees, or reimbursements;
 
 9           (C)  To satisfy obligations that the State is required
 
10                to pay by law, including paying fees, permanent
 
11                settlements, subsidies, or other claims, making
 
12                refunds, and returning funds held by the State as
 
13                trustee, custodian, or bailee;
 
14           (D)  For entitlement programs, including public
 
15                assistance, unemployment, and workers'
 
16                compensation programs, established by state or
 
17                federal law;
 
18           (E)  For dues and fees of organizations of which the
 
19                State or its officers and employees are members,
 
20                including the National Association of Governors,
 
21                the National Association of State and County
 
22                Governments, and the Multi-State Tax Commission;
 
23           (F)  For deposit, investment, or safekeeping, including
 

 
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 1                expenses related to their deposit, investment, or
 
 2                safekeeping;
 
 3           (G)  To governmental bodies of the State; and
 
 4           (H)  As loans, under loan programs administered by a
 
 5                governmental body;
 
 6      (3)  To procure goods, services, or construction from a
 
 7           governmental body other than the University of Hawaii
 
 8           bookstores, from the federal government, or from
 
 9           another state or its political subdivision; [provided
 
10           that University of Hawaii departments and programs,
 
11           without regard to this chapter, may procure goods and
 
12           services from the University of Hawaii bookstores that
 
13           are routinely stocked and marketed and not specially
 
14           ordered;
 
15      (4)  To procure goods or services for the office of
 
16           intercollegiate athletics of the University of Hawaii
 
17           at Manoa with moneys from the University of Hawaii at
 
18           Manoa intercollegiate athletics revolving fund;
 
19      (5)  To procure goods or services, including the following:
 
20           (A)  Services of expert witnesses for potential and
 
21                actual litigation of legal matters involving the
 
22                State, its agencies, and its officers and
 
23                employees, including administrative quasi-
 

 
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 1                judicial proceedings;
 
 2           (B)  Works of art for museum or public display;
 
 3           (C)  Research and reference materials including books,
 
 4                maps, periodicals, and pamphlets, which are
 
 5                published in print, video, audio, magnetic, or
 
 6                electronic form;
 
 7           (D)  Meats and foodstuffs for the Kalaupapa settlement;
 
 8           (E)  Opponents for athletic contests;
 
 9           (F)  Utility services whose rates or prices are fixed
 
10                by regulatory processes or agencies;
 
11           (G)  Performances, including entertainment, speeches,
 
12                and cultural and artistic presentations;
 
13           (H)  Goods and services for commercial resale by the
 
14                State;
 
15           (I)  Services of printers, rating agencies, support
 
16                facilities, fiscal and paying agents, and
 
17                registrars for the issuance and sale of the
 
18                State's or counties' bonds; and
 
19           (J)  Travel arrangements purchased by the University of
 
20                Hawaii for its intercollegiate athletic programs;]
 
21      (4)  For procurements of any other goods or services which
 
22           the policy board determines by rule or the chief
 
23           procurement officer determines by rule and in writing
 

 
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 1           is available from multiple sources but for which
 
 2           procurement by competitive means is either not
 
 3           practicable or not advantageous to the State; and
 
 4     [(6)] (5)  Which are specific procurements expressly exempt
 
 5           from any or all of the requirements of this chapter by:
 
 6           (A)  References in state or federal law to provisions
 
 7                of this chapter or a section of this chapter, or
 
 8                references to a particular requirement of this
 
 9                chapter; and
 
10           (B)  Trade agreements, including the Uruguay Round
 
11                General Agreement on Tariffs and Trade (GATT),
 
12                which require certain non-construction and non-
 
13                software development procurements by the
 
14                comptroller to be conducted in accordance with its
 
15                terms.
 
16      (c)  Governmental bodies making procurements which are
 
17 exempt from this chapter are nevertheless encouraged to adopt and
 
18 use provisions of this chapter and its implementing rules as
 
19 appropriate; provided that the use of one or more provisions
 
20 shall not constitute a waiver of the exemption conferred and
 
21 subject the procurement or the governmental body to any other
 
22 provision of this chapter."
 
23      SECTION 13.  Section 103D-201, Hawaii Revised Statutes, is
 

 
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 1 amended by amending subsection (b) to read as follows:
 
 2      "(b)  The policy board shall consist of seven members.
 
 3 Notwithstanding the limitations of section 78-5, the members of
 
 4 the board shall include:
 
 5      (1)  The comptroller;
 
 6      (2)  A county employee with significant high-level
 
 7           procurement experience; and
 
 8      (3)  Five persons who shall not otherwise be full-time
 
 9           employees of[, or contractors with,] the State or any
 
10           county; provided that at least one member shall be a
 
11           certified professional in the field of procurement, at
 
12           least one member shall have significant high-level,
 
13           federal procurement experience, and at least two
 
14           members shall have significant experience in the field
 
15           of health and human services.
 
16 Each appointed member shall have demonstrated sufficient business
 
17 or professional experience to discharge the functions of the
 
18 policy board.  The initial and subsequent members of the policy
 
19 board, other than the comptroller, shall be appointed by the
 
20 governor from a list of three individuals for each vacant
 
21 position, submitted by a nominating committee composed of four
 
22 individuals chosen as follows:  two persons appointed by the
 
23 governor; one person appointed by the president of the senate;
 

 
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 1 and one person appointed by the speaker of the house.  Except as
 
 2 provided in this section, the selection and terms of the policy
 
 3 board members shall be subject to the requirements of section
 
 4 26-34.  No member of the policy board shall act concurrently as a
 
 5 chief procurement officer.  The members of the policy board shall
 
 6 devote such time to their duties as may be necessary for the
 
 7 proper discharge thereof."
 
 8      SECTION 14.  Section 103D-203, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§103D-203  Chief procurement officers.(a)  The chief
 
11 procurement officer for each of the following state entities
 
12 shall be:
 
13      (1)  The judiciary--the administrative director of the
 
14           courts;
 
15      (2)  The senate--the president of the senate;
 
16      (3)  The house of representatives--the speaker of the house
 
17           of representatives;
 
18      (4)  The office of Hawaiian affairs--the chairperson of the
 
19           board;
 
20     [(5)  The University of Hawaii--the president of the
 
21           University of Hawaii;
 
22      (6)] (5)  The department of education, excluding the Hawaii
 
23           public library system--the superintendent of education;
 

 
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 1           and
 
 2     [(7)] (6)  The remaining departments of the executive branch
 
 3           of the State and all governmental bodies
 
 4           administratively attached to them--the [administrator]
 
 5           policy board of the state procurement office of the
 
 6           department of accounting and general services.
 
 7      (b)  The chief procurement officers for each of the several
 
 8 counties shall be:
 
 9      (1)  The executive branch--the respective finance directors
 
10           of the several counties[; and], except as provided in
 
11           paragraphs (3) and (4);
 
12      (2)  The legislative branch--the respective chairpersons of
 
13           the councils of the several counties;
 
14      (3)  The Honolulu, Kauai, and Maui boards or departments of
 
15           water supply--the respective managers and chief
 
16           engineers of the boards or departments of water supply
 
17           as designated by county charter; and
 
18      (4)  The Hawaii board of water supply--the manager of the
 
19           board of water supply as designated by county charter;
 
20 provided that the chief procurement officers designated under
 
21 paragraphs (1) [and], (2), (3), and (4) shall not exercise their
 
22 powers or duties over contracting in a manner contrary to the
 
23 respective county's charter, ordinances, or rules adopted in
 

 
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 1 accordance with chapter 91.
 
 2      (c)  For purposes of applying this chapter to the judiciary,
 
 3 houses of the legislature, office of Hawaiian affairs, department
 
 4 of education, [University of Hawaii,] remaining departments of
 
 5 the executive branch and all governmental bodies administratively
 
 6 attached to them, and the several counties, unless otherwise
 
 7 expressly provided, "State" shall mean "judiciary," "state
 
 8 senate," "state house of representatives," "office of Hawaiian
 
 9 affairs," "department of education," ["University of Hawaii,"]
 
10 "executive branch," [and] "county," and "board of water supply,"
 
11 or "department of water supply," respectively."
 
12      SECTION 15.  Section 103D-309, Hawaii Revised Statutes, is
 
13 amended by amending subsection (a) to read as follows:
 
14      "(a)  [No contract] Contracts awarded pursuant to section
 
15 103D-302, 103D-303, or 103D-306, shall not be binding or of any
 
16 force and effect unless the comptroller, the director of finance
 
17 of a county, or the respective chief financial officers of [the
 
18 University of Hawaii,] the department of education, the
 
19 judiciary, or the legislative branches of the State or county, as
 
20 the case may be, endorses thereon a certificate that there is an
 
21 appropriation or balance of an appropriation over and above all
 
22 outstanding contracts, sufficient to cover the amount required by
 
23 the contract; provided that if the contract is a multi-term
 

 
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 1 contract, the comptroller, director of finance, or chief
 
 2 financial officer shall only be required to certify that there is
 
 3 an appropriation or balance of an appropriation over and above
 
 4 all outstanding contracts, that is sufficient to cover the amount
 
 5 required to be paid under the contract during the fiscal year or
 
 6 remaining portion of the fiscal year of each term of the multi-
 
 7 year contract[; provided further that this].  This section shall
 
 8 not apply to any contract under which the total amount to be paid
 
 9 to the contractor cannot be accurately estimated at the time the
 
10 contract is to be awarded, or to any contract for which
 
11 consideration is in kind or forbearance[.], or to any contract
 
12 awarded pursuant to section 103D-306 that is a one-time payment
 
13 through a purchase order."
 
14      SECTION 16.  Section 103D-703.5, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "[[]§103D-703.5[]]  Settlement [on performance bonds.] of
 
17 default by contractor.  Upon default of a contractor, the
 
18 purchasing agency may accept moneys in satisfaction of the
 
19 contractor's obligation on a contract whether such moneys are
 
20 realized from the performance surety's obligation on its bond[.],
 
21 an insurer's obligation on the contractor's policy, or any other
 
22 source of moneys accepted as satisfaction of the contractor's
 
23 default.  Such moneys shall be deemed to be trust moneys and
 

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

 
 1 shall be deposited into a trust account with and under the
 
 2 control of the purchasing agency.  These moneys and the interest
 
 3 earned thereon shall be used for the completion of such contract.
 
 4 Upon completion of the contract, any excess moneys shall be
 
 5 deposited in the general fund unless otherwise restricted."
 
 6      SECTION 17.  Section 103D-1001, Hawaii Revised Statutes, is
 
 7 amended by adding five new definitions to be appropriately
 
 8 inserted and to read as follows:
 
 9      ""Direct labor" means all work required for preparation,
 
10 processing, or packing of goods or performance of services, but
 
11 not work relating to supervision, administration, inspection, or
 
12 shipping.
 
13      "Fair market price" means the price of a product or service
 
14 paid by a willing buyer to a willing seller, that is reasonably
 
15 comparable to prices on the open market.
 
16      "Person with disabilities" means any person who is so
 
17 severely incapacitated by any physical or mental disability that
 
18 the person cannot engage in normal competitive employment because
 
19 of the disability.
 
20      "Public agency" means any agency of the State or county.
 
21      "Qualified community rehabilitation program" means a
 
22 nonprofit community rehabilitation program for persons with
 
23 disabilities that:
 

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

 
 1      (1)  Is organized and incorporated under the laws of the
 
 2           United States or this State, and located in this State;
 
 3      (2)  Is operated in the interest of and employs persons with
 
 4           disabilities;
 
 5      (3)  Does not inure any part of its net income to any
 
 6           shareholder or other individual;
 
 7      (4)  Complies with all applicable occupational health and
 
 8           safety standards required by the federal, state, and
 
 9           county governments; and
 
10      (5)  Holds a current certificate from the United States
 
11           Department of Labor pursuant to the Fair Labor
 
12           Standards Act, Title 29 United States Code section
 
13           214(c), and is certified by the state department of
 
14           labor and industrial relations under section 387-9 and
 
15           applicable administrative rules relating to the
 
16           employment of persons with disabilities."
 
17      SECTION 18.  Section 103D-1001.5, Hawaii Revised Statutes,
 
18 is amended to read as follows:
 
19      "[[]§103D-1001.5[]]  Application of this part.  The
 
20 preferences in this part shall apply, when applicable, to
 
21 procurements made pursuant to [sections] section 103D-302 [and]
 
22 or 103D-303[.], or both."
 
23      SECTION 19.  Section 103D-1003, Hawaii Revised Statutes, is
 

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

 
 1 amended to read as follows:
 
 2      "§103D-1003  Printing, binding, and stationery work.(a)
 
 3 All bids [or proposals] submitted under section 103D-302 for a
 
 4 printing, binding, or stationery contract in which all work will
 
 5 be performed in-state, including all preparatory work, presswork,
 
 6 bindery work, and any other production-related work, to include
 
 7 storage and shipping costs, shall receive a fifteen per cent
 
 8 preference for purposes of bid [or proposal] evaluation.
 
 9      (b)  Where bids [or proposals] are for work performed in-
 
10 state and out-of-state, then for the purpose of selecting the
 
11 lowest bid [or evaluating proposals] submitted only, the amount
 
12 bid [or proposed] for work performed out-of-state shall be
 
13 increased by fifteen per cent.  The lowest total [offer,] bid,
 
14 taking the preference into consideration, shall be awarded the
 
15 contract unless the solicitation provides for additional award
 
16 criteria.  The contract amount awarded, however, shall be the
 
17 amount of the price offered, exclusive of the preference."
 
18      SECTION 20.  Section 103D-1007, Hawaii Revised Statutes, is
 
19 amended by amending subsections (c) and (d) to read as follows:
 
20      "(c)  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 two
 

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

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

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

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

 
Page 28                                                    985
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                                                        S.D. 1
                                                        

 
 1 to the county, each year within forty-five days following the
 
 2 close of the county's fiscal year, shall prepare and file with
 
 3 the council of the county an annual inventory return of all
 
 4 nonexpendable county property in the possession, custody,
 
 5 control, or use of the officer, head of department, agent,
 
 6 employee, or other person making the annual inventory return, or
 
 7 of the offices or departments over which the officer presides.
 
 8 The annual inventory return shall contain the following:
 
 9      (1)  A summary and list by detailed item description and
 
10           carrying value of all nonexpendable county property on
 
11           hand as of the close of the county's fiscal year for
 
12           which the return is made;
 
13      (2)  A summary and list by detailed item description and
 
14           carrying value of all nonexpendable county property
 
15           acquired and disposed of during the year elapsed since
 
16           the return made as of the preceding close of the fiscal
 
17           year; and
 
18      (3)  A sworn statement certifying the information on the
 
19           return, property listings, and carrying values provided
 
20           with the return to be full, true, and correct to the
 
21           best knowledge, information, and belief of the officer
 
22           making the return."
 
23      SECTION 23.  Section 128-10, Hawaii Revised Statutes, is
 

 
Page 29                                                    985
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                                                        S.D. 1
                                                        

 
 1 amended to read as follows:
 
 2      "§128-10  Other powers.  The governor further, irrespective
 
 3 of the existence of a civil defense emergency period, may:
 
 4      (1)  Cooperate with the President and the heads of the armed
 
 5           forces, and the civil defense agency of the United
 
 6           States, and with the officers and agencies of other
 
 7           states in matters pertaining to the civil defense of
 
 8           the State and nation and the incidents thereof, and
 
 9           take any measures which the governor may consider
 
10           proper to carry into effect any request of the
 
11           President or the appropriate federal officers and
 
12           agencies, for any action looking to civil defense;
 
13      (2)  Lease, lend, or otherwise furnish, on such terms and
 
14           conditions as the governor may consider necessary to
 
15           promote the public welfare and protect the interest of
 
16           the State, any real or personal property of the state
 
17           government or its political subdivisions, to the
 
18           President, the heads of the armed forces, or to the
 
19           civil defense agency of the United States;
 
20      (3)  On behalf of the State enter into mutual aid agreements
 
21           or compacts with the federal government and with other
 
22           states.  The agreements or compacts shall be limited to
 
23           civil defense.  It may be provided in an interstate
 

 
Page 30                                                    985
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                                                        S.D. 1
                                                        

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

 
Page 31                                                    985
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                                                        S.D. 1
                                                        

 
 1                compact shall be liable on account of any act or
 
 2                omission on the part of the forces while so
 
 3                engaged, or on account of the maintenance or use
 
 4                of any materials, equipment, goods, or facilities
 
 5                in connection therewith;
 
 6           (D)  As an alternative to paragraph (C), such other or
 
 7                modified form of immunity as the governor may find
 
 8                acceptable;
 
 9           (E)  Each party state shall provide for the payment of
 
10                compensation and death benefits to injured members
 
11                of the civil defense forces of that state and the
 
12                representatives of deceased members of the forces
 
13                in case the members sustain injuries or are killed
 
14                while rendering aid pursuant to the compact, in
 
15                the same manner and on the same terms as if the
 
16                injury or death were sustained within the state;
 
17           (F)  Any party state rendering aid in another state
 
18                pursuant to the compact shall be reimbursed by the
 
19                party state receiving aid, or by the United States
 
20                government under plans approved by it, for any
 
21                loss or damage to, or expense incurred in the
 
22                operation of any equipment answering a request for
 
23                aid, and for all costs incurred in connection with
 

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

 
 1                requests for aid; provided that this paragraph
 
 2                shall not be deemed to preclude the State, if it
 
 3                is the aiding state, from assuming in whole or in
 
 4                part the loss, damage, expense, or other cost, or
 
 5                from loaning the equipment or donating the
 
 6                services to the receiving party state without
 
 7                charge or cost;
 
 8           (G)  Any party state receiving evacuees shall be
 
 9                reimbursed generally for the out-of-pocket
 
10                expenses incurred in receiving and caring for the
 
11                evacuees, for expenditures for transportation,
 
12                food, clothing, medicines, and medical care, and
 
13                like items; the expenditures shall be reimbursed
 
14                by the party state of which the evacuees are
 
15                residents, or by the United States government
 
16                under plans approved by it; and
 
17           (H)  In the event of an evacuation, the party state of
 
18                which the evacuees are residents shall, after the
 
19                termination of the emergency or disaster, assume
 
20                the responsibility for the ultimate support or
 
21                repatriation of the evacuees;
 
22      (4)  Sponsor and develop mutual aid plans and agreements for
 
23           civil defense between the political subdivisions of the
 

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

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

 
Page 34                                                    985
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                                                        S.D. 1
                                                        

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

 
Page 35                                                    985
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                                                        S.D. 1
                                                        

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

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

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

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

 
 1           agencies, officers, and other persons as the governor
 
 2           deems necessary to carry out this chapter; determine to
 
 3           what extent any law prohibiting the holding of more
 
 4           than one office or employment applies to the agencies,
 
 5           officers, and other persons; and subject to section
 
 6           128-15, provide for and effect the interchange of
 
 7           personnel, by detail, transfer, or otherwise, between
 
 8           the State and any political subdivision, or among any
 
 9           agencies or departments of the State;
 
10     (12)  Make charges in such cases and in such amounts as the
 
11           governor deems advisable, for any property sold, work
 
12           performed, services rendered, or accommodations or
 
13           facilities furnished by the government under this
 
14           chapter; and make charges for licenses or permits to
 
15           cover administrative expense connected therewith;
 
16     (13)  Make such contracts as may be necessary to carry out
 
17           this chapter;
 
18     (14)  Establish special accounting forms and practices
 
19           whenever necessary; and
 
20     (15)  Take any and all steps necessary or appropriate to
 
21           carry out the purposes of this chapter and to provide
 
22           for civil defense and other emergency functions.
 
23 The powers and authority conferred upon the governor by this
 

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

 
 1 chapter are in addition to any other powers or authority
 
 2 conferred upon the governor by the laws of the United States and
 
 3 of the State for the same or a like purpose, and shall not be
 
 4 construed as abrogating, limiting, or modifying any such powers,
 
 5 or authority."
 
 6      SECTION 24.  Section 128-13, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§128-13  Power and authority of local organizations.  Each
 
 9 political subdivision shall have the power and authority:
 
10      (1)  Deputy director's staff.  To provide, for the deputy
 
11           director of such political subdivision, an assistant or
 
12           assistants whose appointment shall be approved by the
 
13           director of civil defense, and such technical,
 
14           clerical, stenographic, and other personnel, office
 
15           space, furniture, equipment, supplies, and funds as may
 
16           be necessary to carry out the purposes of this chapter.
 
17           Chapter 76 shall apply to the full-time deputy director
 
18           or the deputy director's first assistant.
 
19      (2)  Appropriations, etc.  To make appropriations and
 
20           authorize expenditures for the purposes of this
 
21           chapter, including the power to place under the control
 
22           of the governor, for expenditure as matching funds for
 
23           federal aid, or for any purpose within the powers of
 

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

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

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

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

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

 
 1      (6)  Charges.  To make charges in such cases and in such
 
 2           amounts as it deems advisable, for any property sold,
 
 3           work performed, services rendered, or accommodations or
 
 4           facilities furnished by the political subdivision under
 
 5           this chapter.
 
 6      (7)  Contracts.  To make or authorize such contracts as may
 
 7           be necessary to carry out this chapter.
 
 8      (8)  Mutual aid plans.  To participate in and carry out
 
 9           mutual aid plans and agreements or compacts, sponsored
 
10           or developed by the state civil defense agency.
 
11      (9)  Continuity of government.  To insure continuity of
 
12           government during a civil defense emergency period, the
 
13           legislative body of a county may by ordinance, unless
 
14           otherwise provided by law, provide the procedure for
 
15           the appointment and designation of stand-by officers
 
16           for the legislative body and the elected chief
 
17           executive of the county for the emergency period, who
 
18           shall serve in the event of the unavailability of the
 
19           officers for whom they stand by."
 
20      SECTION 25.  Section 382-3, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "§382-3  Government operations.  After the issuance of a
 
23 proclamation pursuant to section 382-2 and during the emergency
 

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

 
 1 thereby proclaimed, the governor may seize and take possession of
 
 2 and operate the entire plant and facilities, including related
 
 3 facilities, of any stevedoring company whose operations are
 
 4 suspended or substantially reduced, or so much thereof, or such
 
 5 interest therein, as the governor may deem necessary in order to
 
 6 carry out the purposes of this chapter.
 
 7      Such government operations may be conducted by the governor
 
 8 through such department or agency of the State as the governor
 
 9 may designate and the governor may delegate to such agency such
 
10 of the governor's powers as are necessary to conduct the
 
11 operations.
 
12      The governor shall have such power and authority as shall be
 
13 reasonably necessary to conduct such government operations in a
 
14 manner consistent with the public health, safety, and welfare,
 
15 including, without limitation upon the generality of the
 
16 foregoing, the power to make such contracts and arrangements with
 
17 ship owners, charterers, agents, and operators, wharf and pier
 
18 owners and operators, stevedoring companies, trucking operators,
 
19 warehouse workers and other persons as may be required in order
 
20 to provide stevedoring services and related services.  The
 
21 governor may make contracts without regard to chapter 103D and
 
22 sections [103-41 to 103-57] 103-50, 103-50.5, 103-53, and 103-55
 
23 and, specifically, the certificate of the comptroller as to the
 

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

 
 1 availability of an unexpended appropriation or balance of an
 
 2 appropriation to cover the amount required by any such contract
 
 3 shall not be required."
 
 4      SECTION 26.  Sections 103D-1002, 103D-1102, 103D-1104,
 
 5 103D-1203, 103D-1206, 103D-1209, 103D-1211, 103D-1212, 103D-1214,
 
 6 Hawaii Revised Statutes, are amended by substituting the phrase
 
 7 "policy board", or like term, wherever the phrase "administrator
 
 8 of the state procurement office", or like term, appears, as the
 
 9 context requires.
 
10      SECTION 27.  Section 103-15, Hawaii Revised Statutes, is
 
11 repealed.
 
12      ["§103-15  Contract provisions to consider traffic.(a)
 
13 Unless otherwise prohibited by law, all public contracts awarded
 
14 under this chapter shall consider the extent to which the work
 
15 undertaken pursuant to the contract will increase traffic
 
16 congestion.  The contract shall contain provisions to reasonably
 
17 minimize any adverse impact.
 
18      (b)  The feasibility of off-hour construction shall be
 
19 considered for all public contracts that result in significant
 
20 traffic congestion or delay during the term of the contract.
 
21      (c)  As used in this section, "off-hour construction" means
 
22 construction performed between the hours of six o'clock p.m. and
 
23 six o'clock a.m."]
 

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

 
 1      SECTION 28.  Section 103-21, Hawaii Revised Statutes, is
 
 2 repealed.
 
 3      ["§103-21  Officer defined.  The term "procurement officer"
 
 4 as used in chapter 103D with respect to contracts entered into by
 
 5 a county or a board, bureau, or commission thereof authorized to
 
 6 contract in its own behalf, means the council of the county or
 
 7 the governing body of such board, bureau, or commission as
 
 8 constituted by law, or such officer as is authorized by the
 
 9 county council or the board, bureau, or commission to act as its
 
10 contracting officer."]
 
11      SECTION 29.  Section 103-22.1, Hawaii Revised Statutes, is
 
12 repealed.
 
13      ["§103-22.1  Services of the handicapped.  When a
 
14 governmental agency contracts for or purchases services, five per
 
15 cent preference shall be given to services to be performed by
 
16 nonprofit corporations or public agencies operating sheltered
 
17 workshops servicing the handicapped in conformance with criteria
 
18 established by the department of labor and industrial relations
 
19 pursuant to chapter 91; provided that service contracts awarded
 
20 under this section shall be exempt from the wages provision of
 
21 section 103-55.  The state comptroller shall adopt rules under
 
22 chapter 91 to establish the preference for the services to be
 
23 performed by nonprofit corporations or public agencies operating
 

 
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 1 sheltered workshops consistent with this section."]
 
 2      SECTION 30.  Section 103-24.6, Hawaii Revised Statutes, is
 
 3 repealed.
 
 4      ["§103-24.6  Indigenous and Polynesian introduced plants;
 
 5 use in public landscaping.(a)  Wherever and whenever feasible,
 
 6 all plans, designs, and specifications for new or renovated
 
 7 landscaping of any building, complex of buildings, facility,
 
 8 complex of facilities, or housing developed by the State with
 
 9 public moneys shall incorporate indigenous land plant species, as
 
10 defined in section 195D-2, and plant species brought to Hawaii by
 
11 Polynesians before European contact, such as the kukui, noni, and
 
12 coconut; provided that suitable cultivated plants can be made
 
13 available for this purpose without jeopardizing wild plants in
 
14 their natural habitat; and provided further that wherever and
 
15 whenever possible, indigenous land plants shall be used for
 
16 landscaping on the island or islands on which the species
 
17 originated.
 
18      (b)  Each plant or group of plants used pursuant to
 
19 subsection (a) shall be clearly identified with signs for the
 
20 edification of the general public.
 
21      (c)  The policy board shall adopt rules pursuant to chapter
 
22 91 to carry out the purposes of this section."]
 
23      SECTION 31.  Section 103-49, Hawaii Revised Statutes, is
 

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

 
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 1 this section."]
 
 2      SECTION 32.  Section 103-53.5, Hawaii Revised Statutes, is
 
 3 repealed.
 
 4      ["§103-53.5  Tax adjustment for out-of-state vendors and
 
 5 tax-exempt bidders.  Where the bidder or vendor is an out-of-
 
 6 state vendor not doing business in the State or is a person
 
 7 exempted from paying the applicable general excise tax, the
 
 8 package bid or purchase price, for the purpose of determining the
 
 9 lowest price bid, shall be increased by the applicable retail
 
10 rate of general excise tax and the applicable use tax.  The
 
11 lowest responsible bidder, taking into consideration the above
 
12 increases, shall be awarded the contract, but the contract amount
 
13 of any contract awarded shall not include the amount of the
 
14 increases."]
 
15      SECTION 33.  Section 103-54, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["§103-54  Wages of certain laborers paid weekly; penalty.
 
18 All contracts executed pursuant to this chapter involving the
 
19 employment of laborers shall provide for weekly payment of wages
 
20 to all laborers whose rate of compensation is $5 or less per day.
 
21 Every laborer employed by the contractor or any subcontractor
 
22 under any such contract whose rate of compensation is $5 or less
 
23 per day shall be paid the laborer's wages weekly by the laborer's
 

 
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 1 employer, whether or not the requirement is set forth in the
 
 2 contract.  Every contractor or subcontractor who violates this
 
 3 section shall be fined not more than $500."]
 
 4      SECTION 34.  Section 103-56, Hawaii Revised Statutes, is
 
 5 repealed.
 
 6      ["§103-56  Pay days.  Except as provided in section 103-54
 
 7 the fifteenth and last days in each month shall be the pay days
 
 8 of all employees engaged in constructing or repairing roads,
 
 9 bridges, or streets for the State."]
 
10      SECTION 35.  Section 103-57, Hawaii Revised Statutes, is
 
11 repealed.
 
12      ["§103-57  Only citizens employed, exception.  No person
 
13 shall be employed as a mechanic or laborer upon any public work
 
14 carried on by the State or by any political subdivision thereof,
 
15 whether the work is done by contract or otherwise, unless the
 
16 person is a citizen of the United States and of the State or
 
17 eligible to become such a citizen; provided that in cases where
 
18 it is not reasonably practicable to obtain competent persons with
 
19 the foregoing qualifications, persons without such qualifications
 
20 may, with the approval of the governor where the compensation for
 
21 such employment is paid out of state funds, or with the approval
 
22 of the mayor where the compensation for such employment is paid
 
23 out of county funds or out of funds under the control of any
 

 
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 1 county board, bureau, or commission, be employed until persons
 
 2 with such qualifications competent for such services can be
 
 3 obtained."]
 
 4      SECTION 36.  Section 103-58, Hawaii Revised Statutes, is
 
 5 repealed.
 
 6      ["§103-58  Officers, etc., forbidden interest in government
 
 7 contracts.  No officer or head of any department of the State or
 
 8 of any political or municipal subdivision thereof having the
 
 9 power to make or award a contract on the part of the government
 
10 shall, on behalf of the State or of such subdivision thereof
 
11 under which he may be elected or appointed, as the case may be,
 
12 make, or award, or participate in the awarding of a contract to
 
13 himself or to any partnership or corporation in which he is a
 
14 member or stockholder when the contract involves the expenditure
 
15 of government funds in excess of $50.
 
16      Nor shall any officer or head of any department of the State
 
17 or any subdivision thereof before or after award of contracts,
 
18 gain an interest as subcontractor or otherwise for which he shall
 
19 receive a consideration of over $50 in any contract which he has
 
20 made or awarded or participated in the making or awarding of, on
 
21 behalf of the State or on behalf of any subdivision thereof under
 
22 which he may be elected or appointed, as the case may be.  This
 
23 section shall not apply (1) if the contract is made with a
 

 
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 1 corporation in which the officer of the State or any subdivision
 
 2 thereof has the ownership of not more than five per cent of the
 
 3 capital stock if it be a corporation or joint stock company; (2)
 
 4 if any contract made by the State or any subdivision thereof is
 
 5 awarded to the lowest responsible bidder after advertisement for
 
 6 sealed tenders according to law in cases where the sum to be
 
 7 expended is $1,000 or more; or (3) if any contract is awarded to
 
 8 the lowest responsible bidder when requests of the same character
 
 9 have been made to the principal dealers, contractors, persons,
 
10 partnerships, or corporations doing such work or selling such
 
11 commodities for sealed tenders for the same in cases where the
 
12 sum to be expended is more than $50 and less than $100."]
 
13      SECTION 37.  Section 103-59, Hawaii Revised Statutes, is
 
14 repealed.
 
15      ["§103-59  Violation voids contract.  A violation of section
 
16 103-58 shall render the contract or agreement in respect of which
 
17 such violation occurs void."]
 
18      SECTION 38.  Section 103-60, Hawaii Revised Statutes, is
 
19 repealed.
 
20      ["§103-60  Penalty.  Any person who violates section 103-58
 
21 shall be fined not more than $1,000 or imprisoned not more than
 
22 one year, or both."]
 
23      SECTION 39.  Section 103-71, Hawaii Revised Statutes, is
 

 
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 1 repealed.
 
 2      ["[§103-71]  Energy efficiency through life-cycle costing.
 
 3 (a)  The procurement practices of the State and its counties
 
 4 shall include energy efficiency standards and policies, including
 
 5 life-cycle costing.  These shall be developed and introduced into
 
 6 procurement procedures by July 1, 1978.
 
 7      (b)  In implementing life-cycle costing, the purchasing
 
 8 agent shall be guided by energy efficiency standards and policies
 
 9 for purchasing various items developed and promulgated by the
 
10 United States Department of Energy and other federal agencies,
 
11 and by nationally recognized trade associations, including but
 
12 not limited to the Institute of Government Purchasing Agents, the
 
13 Purchasing Management Association, and the Air Conditioning and
 
14 Refrigeration Institute.  The purchasing agent shall notify
 
15 bidders of information, procedures and forms required in
 
16 implementing energy efficiency standards and policies.  The
 
17 information required shall include purchasing standards and
 
18 policies developed by federal agencies and by nationally
 
19 recognized agencies and associations, as well as energy
 
20 consumption and life-cycle cost data.
 
21      (c)  The purchaser shall consider purchasing via the life-
 
22 cycle costing method those classes of items for which nationally
 
23 recognized energy efficiency data have been developed.  These
 

 
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 1 items shall include but not be limited to automobiles and air
 
 2 conditioning systems.  The watt-saving variety of common-sized
 
 3 fluorescent lamps shall be purchased except where standard
 
 4 wattage of such lamps is specifically required by the using
 
 5 agency."]
 
 6      SECTION 40.  Parts III and V of chapter 103, Hawaii Revised
 
 7 Statutes, are repealed.
 
 8      SECTION 41.  Section 103D-204, Hawaii Revised Statutes, is
 
 9 repealed.
 
10      ["§103D-204  Establishment of the state procurement office;
 
11 administrator.(a)  There shall be a state procurement office,
 
12 placed for administrative purposes only, within the department of
 
13 accounting and general services, which shall be headed by the
 
14 administrator of the state procurement office.  The administrator
 
15 shall be the chief procurement officer for those governmental
 
16 bodies of the executive branch as provided in section
 
17 103D-203(a)(7).  The administrator shall be a full-time public
 
18 official.  The administrator shall serve a term of four years,
 
19 and shall be paid the salary established for deputies or
 
20 assistants to department heads under section 26-53 without
 
21 diminution during the administrator's term of office unless by
 
22 general law applying to all deputies or assistants to department
 
23 heads.
 

 
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 1      (b)  The administrator shall be appointed by the governor
 
 2 from a list of no less than three and no more than five names
 
 3 submitted by the policy board.  The appointment of the
 
 4 administrator shall require the advice and consent of the senate.
 
 5 The administrator may only be removed from office by the
 
 6 governor, provided the governor shall give prior notification of
 
 7 such removal to the chairperson of the policy board, the
 
 8 president of the senate, and the speaker of the house of
 
 9 representatives.
 
10      (c)  The administrator shall have:
 
11      (1)  A minimum of five years experience in public
 
12           procurement within twelve years preceding the date of
 
13           appointment; and
 
14      (2)  Demonstrated executive and organizational ability.
 
15      (d)  The administrator shall operate independently of the
 
16 comptroller.  The administrator may appoint and dismiss a private
 
17 secretary without regard to chapter 76 or 77, who shall serve at
 
18 the administrator's pleasure.  The comptroller shall provide
 
19 support to permit the administrator to satisfy all of the
 
20 administrator's responsibilities as the chief procurement officer
 
21 for those governmental bodies of the executive branch of the
 
22 State for which a chief procurement officer is not otherwise
 
23 designated."] 
 

 
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 1      SECTION 42.  Section 103D-206, Hawaii Revised Statutes, is
 
 2 repealed.
 
 3      ["[§103D-206]  Additional duties of the administrator of the
 
 4 procurement office.  In addition to the duties referred to in
 
 5 section 103D-205, the administrator shall:
 
 6      (1)  Perform periodic review of the procurement practices of
 
 7           all governmental bodies;
 
 8      (2)  Assist, advise, and guide governmental bodies in
 
 9           matters relating to procurement;
 
10      (3)  Develop and administer a statewide procurement
 
11           orientation and training program;
 
12      (4)  Develop, distribute, and maintain a procurement manual
 
13           for all state procurement officials; and
 
14      (5)  Develop, distribute, and maintain a procurement guide
 
15           for vendors wishing to do business with the State and
 
16           its counties."]
 
17      SECTION 43.  Section 103D-1201, Hawaii Revised Statutes, is
 
18 amended by repealing the definition of "administrator of the
 
19 state procurement office".
 
20      [""Administrator of the state procurement office" means the
 
21 chief procurement officer for the governmental bodies of the
 
22 executive branch of the State, other than the University of
 
23 Hawaii, department of education, the several counties, and those
 

 
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 1 governmental bodies administratively attached thereto."]
 
 2      SECTION 44.  Statutory material to be repealed is bracketed.
 
 3 New statutory material is underscored.
 
 4      SECTION 45.  This Act shall take effect on July 1, 1999.