REPORT TITLE:
Managed Competition


DESCRIPTION:
Amends Act 230, Session Laws of Hawaii 1998, to prohibit the
continued maintenance of lawsuits against the State and counties
alleging that government contracts are in violation of civil
service and collective bargaining laws after 5/13/98.

 
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HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO STATE GOVERNMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  In section 1 of Act 230, Session Laws of Hawaii
 
 2 1998, the legislature expressed its intent that, during the
 
 3 development and implementation of a managed competition process
 
 4 relating to the privatization of government contracts, the State
 
 5 and counties would be permitted to contract for necessary goods
 
 6 and services without being disrupted or delayed by lawsuits.
 
 7 Despite this clear intention, the United Public Workers, on May
 
 8 14, 1998, shortly before the effective date of Act 230, filed
 
 9 four lawsuits challenging the validity of numerous contracts
 
10 entered into by the city and county of Honolulu covering a wide
 
11 range of government services including refuse collection, grounds
 
12 maintenance, and equipment maintenance.  Allowing these lawsuits
 
13 to go forward will result in the disruption and delay of
 
14 government services, and is contrary to the intention of the
 
15 legislature in enacting Act 230.  The purpose of this Act is to
 
16 amend Act 230 to clearly prohibit the continued maintenance of
 
17 these lawsuits.
 
18      SECTION 2.  Act 230, Session Laws of Hawaii 1998, is amended
 
19 by amending part IV, section 8, to read as follows:
 

 
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 1      "SECTION 8.  [Except] After May 13, 1998, except as
 
 2 otherwise provided herein, no prior or existing contract, or
 
 3 contract subsequently executed by a department or agency of the
 
 4 State or county under this Act, shall be void or deemed to be or
 
 5 have been void as being contrary to the merit principles under
 
 6 chapters 76 [and], 77, and sections 46-33 and 46-34, Hawaii
 
 7 Revised Statutes, or other applicable law, or the collective
 
 8 bargaining laws under chapter 89, Hawaii Revised Statutes.  The
 
 9 authority of a department or agency of the State or county to
 
10 enter into a contract with a private provider, shall not be
 
11 prevented, restricted, diminished, conditioned, limited, or
 
12 otherwise qualified by chapters 76, 77, 89, and sections 46-33
 
13 and 46-34, Hawaii Revised Statutes[.] or other applicable law."
 
14      SECTION 3.  Act 230, Session Laws of Hawaii 1998, is amended
 
15 by amending part IV, section 10, to read as follows:
 
16      "SECTION 10.  [Section] After June 20, 1998, section 8 of
 
17 this Act shall not be deemed to authorize:
 
18      (1)  Any contract subsequently executed with a private
 
19           entity that directly results in the termination of a
 
20           covered employee in the state or county service; or
 
21      (2)  Any contract subsequently executed with a private
 
22           entity that directly results in the transfer of a
 
23           covered employee from a position in civil service to
 

 
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 1           another position in civil service, or to a position
 
 2           that is exempt from civil service, in which the intent
 
 3           of the transfer is to enable the contracting agency to
 
 4           contract the services of the transferred covered
 
 5           employee to a private entity and to thereafter
 
 6           terminate the public employee without other cause.
 
 7      For purposes of Sections 8, 9, 10, and 11 of this Act, a
 
 8 "covered employee" means an employee, who is in a state or county
 
 9 position that is not exempt under sections 46-33, 46-34, 76-16,
 
10 and 76-77, Hawaii Revised Statutes[;], or other applicable law;
 
11 and "private entity" means individuals, corporations,
 
12 partnerships, limited liability corporations and partnerships,
 
13 and other for profit or nonprofit organizations."
 
14      SECTION 4.  Act 230, Session Laws of Hawaii 1998, part V,
 
15 section 14, is amended by amending subsection (a) to read as
 
16 follows:
 
17      "(a)  Part IV of this Act shall not affect [rights and
 
18 duties that matured, penalties that were incurred, and]
 
19 proceedings that were begun, with respect to specific prior or
 
20 existing contracts, on or prior to [the effective date of this
 
21 Act.  Upon the effective date of this Act,] May 13, 1998;
 
22 provided that such proceedings shall not prevent, restrict,
 
23 diminish, condition, limit or otherwise qualify the authority of
 

 
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 1 a department or agency of the State or county to enter into the
 
 2 same or a similar contract after the effective date of this Act
 
 3 pursuant to Part IV of this Act.  After May 13, 1998, no action
 
 4 or proceeding may be initiated or maintained by any party against
 
 5 the State or county regarding any contract with any private
 
 6 entity for goods, services, or construction that was entered into
 
 7 pursuant to [Part IV of this Act.] prior to May 14, 1998, between
 
 8 May 14, 1998 and July 20, 1998, or after the effective date of
 
 9 this Act.  No compensatory or other damages whatsoever shall be
 
10 awarded against the State or county in any proceeding seeking to
 
11 invalidate a contract as being void as contrary to the merit
 
12 principles under chapters 76, 77, and sections 46-33 and 46-34,
 
13 Hawaii Revised Statutes, or other applicable law, or the
 
14 collective bargaining laws under chapter 89, Hawaii Revised
 
15 Statutes."
 
16      SECTION 5.  Statutory material to be repealed is bracketed.
 
17 New statutory material is underscored.
 
18      SECTION 6.  This Act shall take effect upon its approval.
 
19 
 
20                           INTRODUCED BY:  _______________________
 

 
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