Specifies that nothing shall be construed as limiting state or county authority to contract with private providers for services historically performed by persons or positions in the civil service, or functionally attributed to a government agency or program, including contracts. Provides that contracts for services that would have been authorized under the Act and that were previously contracted in good faith under the preceding chapters or under other law, charter, or ordinance, may be certified under the Act.

A BILL FOR AN ACT

SECTION 1. While our state economy is demonstrating some evidence of recovery after almost a decade of low growth and recession, the demands on government for the delivery of core services continue to increase. Because tax and fee hikes to meet projected government expense increases are counterproductive to the very economic recovery that produces revenues to fund those expenses, it is more important than ever that government have the ability to deliver core services by the most efficient means possible.

To this end, the State and its counties have long used the private sector to afford public services to Hawaii's citizens. Government has benefited from economies of scale, and has used resources that are owned or have been developed by the private sector to achieve savings for the long-term good. When time and need have suggested that opportunities would be missed or that expenses that might be avoided or minimized, government has used services and expertise already available in the private sector rather than "begin from scratch." When expertise or technology has already been available in the private sector, government has taken a hard look at whether it was more economical to "reinvent" or "duplicate the wheel" or to use "theirs" instead. When the private sector has been willing to "experiment" at its own risk, particularly for new capital intense services, government has asked whether existing dollars might be more effectively spent on making basic services available to more citizens. Finally, because most government contracts are competitively let, government has enjoyed the benefit of lower prices or costs that competition has engendered.

Because of the Hawaii supreme court's decision in the consolidated cases Konno v. County of Hawaii, 85 Haw. 61 (1997) and other occurrences, the basic authority of state and county government to deliver public services through the private sector has been called into question. While the supreme court in Konno "emphasize(d) that nothing in this opinion should be interpreted as passing judgment, one way or the other, on the wisdom of privatization," and acknowledged that "(w)hether or not, as a policy matter, private entities should be allowed to provide public services entails a judgment ordinarily consigned to the legislature", it also noted that "the civil service encompasses those services that have been customarily and historically provided by civil servants", and concluded that, absent express legislative authority to obtain services from other sources, civil servants must provide these services.

The purpose of this Act is to provide express legislative authority for any state or county government or entity to use the private sector to deliver goods or services, regardless of whether those goods and services were customarily and historically provided by civil servants.

SECTION 2. Chapter 103, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§103-     Contract with private provider for services. (a) Nothing in chapters 76 and 77, and section 46-33, including the merit principles, the classification system, or historical past practices, shall be deemed to prevent, restrict, diminish, condition, limit, or otherwise qualify the authority of a department or agency of the State or a county to enter into a contract with a private provider to obtain services historically performed by persons or positions in the civil service, or functionally attributed to a government agency or program, including contracts:

(b) Nothing in this section shall be construed as limiting the authority of the State or a county to contract with private providers to obtain services historically performed by persons or positions in the civil service, or functionally attributed to a government agency or program, including contracts."

SECTION 3. A department or agency of the State or a county may certify that the services obtained from a current or prior contract were obtained in good faith, prior to the effective date of this Act, under one or more of the circumstances specified in the amendment to chapter 103, Hawaii Revised Statutes, made in section 2 of this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

SECTION 6. This Act shall take effect upon its approval.