STAND. COM. REP. NO. 2409

Honolulu, Hawaii

RE: S.B. No. 2312

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred S.B. No. 2312 entitled:

"A BILL FOR AN ACT RELATING TO GOVERNMENT CONTRACTS,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify that records created, received, maintained, or used by private contractors performing government functions on behalf of public agencies are subject to the State's Uniform Information Practices Act.

Your Committee received testimony in support of this measure from Public First Law Center, All Hawaii News, Grassroot Institute of Hawaii, and two individuals.

Your Committee received testimony in opposition to this measure from the Department of the Attorney General.

Your Committee received comments on this measure from the Department of Human Services, State Procurement Office, Employees' Retirement System, Office of Information Practices, and League of Women Voters of Hawaii.

Your Committee finds that transparency and accountability in government operations are fundamental to public trust. Your Committee further finds that the State's Uniform Information Practices Act (UIPA), which requires government agencies to maintain, and allow the public to access government records, plays a critical role in ensuring an open and transparent government. Your Committee notes, however, that these obligations may be circumvented through the outsourcing of government functions to private contractors that are not subject to the UIPA. This measure closes a loophole in existing law to ensure the public's right to government transparency and accountability.

Your Committee notes the concerns expressed by the Department of the Attorney General that the requirements in the measure as introduced are overly burdensome and would discourage contractors from bidding on state projects; raise practical and legal concerns relating to government agencies' record retention and disclosure responsibilities, including complying with the ten-day response deadline for information requests from the public; and are unnecessary. Accordingly, your Committee respectfully requests that subsequent Committees to which this measure is referred consider these issues.

Your Committee has amended this measure by:

(1) Replacing the phrase "government function" with "agency function" to avoid conflation of their distinct meanings;

(2) Inserting language exempting the Employees' Retirement System from the requirements of this measure to allow the system to continue expediently performing its fiduciary duties while maintaining transparency;

(3) Inserting an effective date of January 1, 2525, to encourage further discussion; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2312, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2312, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Government Operations,

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ANGUS L.K. MCKELVEY, Chair