STAND. COM. REP. NO. 978

Honolulu, Hawaii

RE:    S.B. No. 17

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 17, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

     The purpose of this measure is to prohibit government contracts under $5,000,000 for design professional services to require the design professional to defend the State against all claims.

     Your Committee received testimony in support of this measure from the Small Business Regulatory Review Board, the American Council of Engineering Companies, the American Institute of Architects Hawaii State Council, the Coalition of Hawaii Engineering and Architectural Professionals, Consulting Structural Hawaii, Inc., Engineering Concepts, Inc., Engineering Solutions, Inc., Finance Insurance, Ltd., Kai Hawaii, Inc., the Limtiaco Consulting Group, Masa Fujioka & Associates, and Shimabukuro, Endo & Yoshizaki, Inc.  The Corporation Counsel of the City and County of Honolulu opposed this measure.  The Attorney General testified in opposition to this measure and proposed an amendment.

     Your Committee finds that many design professionals are small business owners for whom the requirement to defend the State is unduly onerous.  This bill allows contracts to require the design professional to indemnify the State and hold the State harmless.

     Your Committee has amended this measure by:

(1)  Changing the effective date to July 1, 2059, to encourage further discussion; and

(2)  Making technical, nonsubstantive amendments for purposes of clarity and style.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 17, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 17, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

CLAYTON HEE, Chair