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THE SENATE |
S.B. NO. |
2601 |
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THIRTY-THIRD LEGISLATURE, 2026 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO PROCUREMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that section 103D-309, Hawaii Revised Statutes, requires a certification that there are sufficient funds available to cover the cost of a contract before that contract becomes binding. However, this section does not include a specific threshold of funds that must be available, nor does it adequately address the disposition of contract awards that exceed appropriated amounts. The legislature therefore finds that this law should be amended to address these issues by establishing a threshold amount and requiring contracts that exceed that amount to be approved by the chief procurement officer.
The legislature additionally finds that the current requirement that the state procurement office administrator provide written attestation for recommendations and solicitations under section 103D-309, Hawaii Revised Statutes, is necessary to ensure proper oversight of state resources. Accordingly, the legislature affirms this requirement.
Therefore, the purpose of this Act is to promote transparency, fiscal responsibility, and fair procurement practices by:
(2) Requiring a contract that exceeds the ten per cent threshold to be approved by the chief procurement officer to become binding; and
(3) Limiting the application of criminal penalties under the Hawaii public procurement code to egregious violations of the code and rules adopted thereunder.
SECTION 2. Section 103D-106, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any person who intentionally violates this
chapter or any rules adopted pursuant to this chapter [shall be guilty of a
misdemeanor and] shall be:
(1) Subject to removal from office;
(2) Liable to the State or the appropriate
county for any sum paid by it in connection with the violation, and that sum,
together with interest and costs, shall be recoverable by the State or county; [and]
(3) Subject to imposition of an
administrative fine under subsection (b)[.]; and
(4) Subject to prosecution for a misdemeanor in cases of egregious violations."
SECTION 3. Section 103D-309, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
(1) The awarded contract amount does not
exceed ten per cent of the amount of the available appropriation or balance of
an appropriation; provided further that a contract that exceeds the ten per
cent threshold shall require approval from the chief procurement officer to become
binding for the purposes of this section; and
(2) If the contract is a multi-term
contract, the comptroller, director of finance, or chief financial officer
shall only be required to certify that there is an appropriation or balance of
an appropriation over and above all outstanding contracts[,] that is
sufficient to cover the amount required to be paid under the contract during
the fiscal year or remaining portion of the fiscal year of each term of the
multi‑year contract; [provided further that the] and
(3) The administrator of the state procurement office shall attest in writing to any recommendation or solicitations.
This section shall not apply to any contract under which the total amount to be paid to the contractor cannot be accurately estimated at the time the contract is to be awarded, or to any contract for which consideration is in kind or forbearance, or to any contract awarded pursuant to section 103D-306 that is a one-time payment through a purchase order."
SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the state procurement office to carry out the purposes of this Act, including the establishment and hiring of permanent full-time equivalent ( FTE) positions.
The sum appropriated shall be expended by the state procurement office for the purposes of this Act.
SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2525.
Report Title:
SPO; Procurement; Certification of Available Funds; Threshold Amount; Chief Procurement Officer; Penalties; Appropriation; Positions
Description:
Ensures that awarded contracts are supported by sufficient appropriations by requiring that the contract amount does not exceed 10% of the amount of the appropriation or balance of an appropriation that is available to cover the cost of the contract. Requires a contract that exceeds the 10% threshold to be approved by the Chief Procurement Officer. Limits the application of criminal penalties under the Hawaii Public Procurement Code to egregious violations of the Code and any rules adopted thereunder. Establishes positions within the State Procurement Office. Appropriates funds. Effective 7/1/2525. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.