Prohibits state officials from binding the State to government procurement rules of an international trade agreement without legislative action. (HB2199 CD1)

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 voluntarily 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 established 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 future binding of the State to government procurement rules contained in an international trade agreement without legislative action.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

§   -1 Definitions. As used in this chapter:

"International trade agreement" means a trade agreement or memorandum of agreement between the United States government and a foreign nation, whether bilateral, multilateral, global, or regional, to which the State, at the request of the United States government, is a covered procuring entity; provided the term shall not include a trade agreement or memoranda of agreement:

§   -2 International procurement rules, legislative action. Any international trade agreement entered into by the President of the United States that contains provisions relating in any manner to procurement by the states shall not be valid as to those procurement provisions as it applies to this state, unless the legislature by a simple majority vote on a concurrent resolution approves of those procurement provisions.

§   -3 Prior agreements before Act. Any international trade agreement entered into by the President of the United States, which contains provisions relating in any manner to procurement by the states, and to which the governor has signaled agreement to those procurement provisions prior to the effective date of this Act shall remain valid."

SECTION 3. The revisor of statutes will remain cognizant of the obligations of the State specified in international trade agreements to which the State is a consenting party and annotate these statutes in regards to these obligations, as deemed necessary.

SECTION 4. This Act shall take effect upon its approval.