STAND. COM. REP. NO.  128

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 32

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committees on Economic Development & Business Concerns and International Affairs, to which was referred H.B. No. 32 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

beg leave to report as follows:

     The purpose of this bill is to ensure that state dollars are used to create jobs within and not outside of the United States, by prohibiting state governmental bodies from contracting with or providing economic development assistance to companies that will outsource the work to other countries.

     The Hawaii Government Employees Association submitted testimony in support of this bill.  The Department of Business, Economic Development, and Tourism did not support this bill.  The University of Hawaii opposed this measure.  Comments were received from the State Procurement Office and the Department of Human Services.

Your Committees have amended this bill by:

(1)  Removing penalty provisions that would have allowed a noncompliant contractor's contract to be terminated, monetary penalties to be imposed, and the contractor to be disqualified for other state contracts;

(2)  Providing an exemption for work that is not available locally or domestically that is performed outside the United States;

(3)  Changing the effective date to July 1, 2034, to encourage further discussion of this bill; and

(4)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     Your Committees respectfully request that the Committee on Labor, to which this bill is next referred, examine the Department of Human Services' recommendation to exempt existing contracts.

     As affirmed by the records of votes of the members of your Committees on Economic Development & Business Concerns and International Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 32, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 32, H.D. 1, and be referred to the Committee on Labor & Public Employment.

Respectfully submitted on behalf of the members of the Committees on Economic Development & Business Concerns and International Affairs,

____________________________ RIDA T.R. CABANILLA, Chair

____________________________ KYLE T. YAMASHITA, Chair