Prohibits state officials from binding the State to government procurement rules of an international trade agreement without legislative action.

A BILL FOR AN ACT

SECTION 1. The legislature finds that a number of today's international free trade agreements contain policy obligations and restrictions that would take precedence over state and local government provisions relating to state purchasing laws and preferences. These trade agreements may undermine state and local laws relating to requirements that a product contain a certain minimum amount of recycled material. They may also undermine state laws that would discourage the off-shoring of jobs or encourage the purchase of locally-produced goods and services.

However, because the expenditure of state tax dollars is an intrinsic function of state government, the federal government has refrained from unilaterally binding states to the procurement provisions in international trade agreements. Instead, the United States Trade Representative has sent out correspondences to all the states' governors asking that the governors voluntary bind their states to comply with procurement rules to be included in various new international trade agreements now being negotiated. The legislature is informed that Hawaii governors, in this manner, have bound the State to procurement provisions contained in the World Trade Organization, the United States-Chile Free Trade Agreement, the United States-Singapore Free Trade Agreement, the Moroccan Free Trade Agreement, and the United States-Australia Free Trade Agreement. The provisions contained in these agreements may again undermine provisions of the State's public procurement code and other state preference and set-aside policies set up to promote and protect various sectors and groups of our local economy. However, questions relating to the State's public procurement code or decisions relating to state preference and set-aside policies are within the legislative domain and should require legislative action.

The purpose of this Act is to prohibit the binding of the State to government procurement rules contained in an international trade agreement without legislative action.

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

"§103D- International procurement rules, legislative action. (a) Except as provided in subsection (b), no state official, including the governor, may:

(b) A state official, including the governor, may bind the State or give consent to the United States government to bind the State to the government procurement rules of an international trade agreement only if the legislature, by law, explicitly authorizes the governor to bind the State or give consent to the United States government to bind the State to the government procurement rules of a specific international trade agreement.

(c) As used in this section, "international trade agreement" means a trade agreement between the United States government and a foreign country to which the State, at the request of the United States government, is a covered procuring entity; but the term does not include a trade agreement between the State and a foreign country to which the United States government is not a party."

SECTION 3. Any consent that a state official, including the governor, has given for the State to be bound by the government procurement rules of any international trade agreement on or before the effective date of this Act is declared invalid and the State shall not be bound by the government procurement rules of any international trade agreement for which a state official, including the governor, has given consent for the State to be bound to on or before the effective date of this Act.

SECTION 4. Within ten days of the effective date of this Act, the governor shall inform the United States Trade Representative that the State is revoking forthwith any consent that the governor or any state official had given prior to the effective date of this Act to bind the State to the government procurement rules of any international trade agreement.

SECTION 5. New statutory material is underscored.

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