SB284 HD1

SECTION 1. The legislature finds that the office of enterprise technology services' data center was created more than forty years ago and has received minimal, if any, subsequent upgrades. The data center runs all key state programs; however, because the data center can no longer be brought to acceptable modern data center standards, it is no longer used to run any critical state programs. The legislature also finds that the office's data center comprises a primary data center that is located in the basement of the Kalanimoku building, which is susceptible to flooding; one satellite data center located at the University of Hawaii at Manoa; and one satellite data center located at a commercial data center. There are also numerous department- and agency-run processing facilities throughout the State having varying degrees of business-continuity readiness. The legislature notes that some agencies are considering relocating the agencies' respective satellite data centers to either the Kalanimoku building or a third-party commercial facility.

The legislature believes that upgrading, modernizing, and consolidating the office of enterprise technology services' data center will improve the State's resilience against physical damage caused by weather‑related events and cybersecurity threats and ensure the continued, uninterrupted provision of state services. The legislature recognizes that Gartner Consulting submitted a report to the legislature in 2013 identifying these issues and recommending that the State consolidate its various equipment into secure and resilient primary and secondary sites. The legislature also believes that, in order to most efficiently and effectively achieve these benefits, it is important for the State to also adopt cloud computing technologies and establish a statutory preference that they be hosted physically in the State, to address latency and financial impacts.

Accordingly, the purpose of this Act is to:

(1) Require the technology services consolidation working group to:

(A) Decommission the office of enterprise technology services' primary data center located in the Kalanimoku building;

(B) Relocate the office of enterprise technology services' entire data center to an interim primary, secure, and resilient facility; and

(C) Use cloud storage to securely store all state electronic data, with any cloud storage servers or other systems or hardware having their primary production system located within the State; provided that software-as-a-service solutions provided only outside the State are not subject to this restriction;

(2) Extend to June 30, 2028, the dissolution date of the technology services consolidation working group; and

(3) Establish requirements for procurement contracts for information technology-related projects.

SECTION 2. 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- Information technology-related projects; preference for in‑state cloud servers and services. (a) A governmental body that enters into a contract under this chapter for an information technology-related project having an estimated value of no less than $250,000 shall decrease the bid amount of a bidder by five per cent if the bidder provides cloud servers and services that are physically located within the State. The lowest total bid, taking industry standard preferences into consideration, shall be awarded the contract, unless the solicitation provides for additional award criteria; provided that the contract amount awarded shall be the amount of the price offered, exclusive of the preference.

(b) At the time of submission of a competitive sealed bid or a competitive sealed proposal by a bidder, if the bidder seeks a preference under subsection (a), the bidder shall submit documentation that the bidder provides cloud servers and services that are physically located within the State and, if awarded the contract, shall provide written certification on a monthly basis that the bidder provides cloud systems that are physically located within the State. This subsection shall be deemed to be incorporated into any applicable contract. A bidder that is awarded a contract and that received the preference shall be subject to the following sanctions if, during the project, the bidder ceases to provide cloud servers and services that are physically located within the State:

(1) Temporary or permanent cessation of work on the project, without recourse to breach of contract claims by the bidder; provided that the governmental body shall be entitled to restitution for nonperformance or liquidated damages, as appropriate; or

(2) Proceedings to debar or suspend under section 103D‑702.

"Bidder" means an entity that submits a competitive sealed bid under section 103D-302 or submits a competitive sealed proposal under section 103D-303.

"Cloud servers and services" include infrastructure-as-a-service, platform-as-a-service, or software-as-a-service systems and servers."

SECTION 3. Act 179, Session Laws of Hawaii 2022, section 2, is amended as follows:

1. By amending subsection (a) to read:

"(a) There is established a technology services consolidation working group, that shall:

(1) Develop a plan for the phased consolidation of all state executive branch information technology services and staff, where determined practicable by the working group, within five years, excluding the department of education, Hawaii health systems corporation, University of Hawaii, and office of Hawaiian affairs, under the office of enterprise technology services. The plan shall include:

(A) An identification of the specific positions and functions to be transferred in each department;

(B) Proposed dates of transfer for each position and function;

(C) Proposed information technology facility, personnel, and operational infrastructure needs of the consolidated information technology agency, with projections on future integration needs as additional agencies' information technology staff and services are added;

(D) Recommendations to enable the office of enterprise technology services to provide expert support to all state agencies regarding information technology activities in order to meet the needs of the agencies and the public; and

(E) Recommendations to ensure that agency services are not interrupted during the phased consolidation; [~~and~~]

(2) Make recommendations to attract high-quality information technology professionals to the State, including the use of internships[,] and partnering with private providers and carriers, and assess the feasibility of exempting certain positions from the requirements of chapters 76 and 89, Hawaii Revised Statutes[.];

(3) By June 30, 2024:

(A) Decommission the office of enterprise technology services' primary data center located in the Kalanimoku building; and

(B) Relocate the office of enterprise technology services' entire data center, including the primary data center located in the Kalanimoku building and any satellite data center located in any facility under the management and control of a state agency, and all consolidated state information technology data to an interim facility that:

(i) Has the resiliency to perform concurrent maintenance or upgrades without down time;

(ii) Is located outside the extreme tsunami evacuation zone; not located in the Federal Emergency Management Agency Flood Zone A, B, C, or V; and not impacted by the National Oceanic and Atmospheric Administration- anticipated climate-related sea level rise of three feet over the next thirty years;

(iii) Is capable of continuing connectivity with at least three physically and logically diverse carriers;

(iv) Maintains a telework-enabled workforce with capitol district office spaces or workspaces, or both, for support of executive branch agencies in the area; and

(v) Provides for a high-speed printing facility within the capitol district for optimal access by executive branch agencies and a second printing facility at the new centralized site for business continuity;

provided that the working group shall submit to the legislature, no later than twenty days prior to the convening of the regular session of 2025, a report of its findings and recommendations, including any adjustments to this paragraph and any proposed legislation; and

(4) Unless otherwise required by federal law or regulation, by June 30, 2026, use cloud storage to securely store all state electronic data in compliance with state and federal policies and laws; provided that any cloud storage servers or other systems or hardware used pursuant to this paragraph shall have their primary production system located within the State; provided further that software-as-a-service solutions provided only outside the State Shall not be subject to this restriction; provided further that the working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027."

2. By amending subsection (f) to read:

"(f) The working group shall be dissolved on [~~December 31, 2023.~~] June 30, 2028."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	284
THIRTY-SECOND LEGISLATURE, 2023		S.D. 2
STATE OF HAWAII		H.D. 1