STAND. COM. REP. NO. 2174

Honolulu, Hawaii

RE:    S.B. No. 2574

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Tourism and Government Operations, to which was referred S.B. No. 2574 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require that any moneys received by, on behalf of, or for the benefit of a governmental body pursuant to a solicitation of funds by the governmental body to cover the costs and expenses of state-sponsored trips and other state-sponsored endeavors to generate business opportunities and goodwill for the State, to be deposited into the general fund and disbursed pursuant to legislative appropriation; and

     (2)  Make an appropriation for costs and expenses of state-sponsored trips and other state-sponsored endeavors to generate business and goodwill for the State.

     Your Committee received testimony in opposition to this measure from the Department of Business, Economic Development, and Tourism and the Department of Accounting and General Services.

     Your Committee finds that any private moneys given to the State to pay for cost and expenses of state-sponsored trips to generate business opportunities and goodwill for the State, constitute "donations" to the State and become state funds.  Only in this manner can the State be sure that the private moneys are not given for ulterior purposes from persons or companies who seek to promote themselves for subsequent procurement opportunities.

     The intent of this measure is to ensure that the procurement process is open and objective with no unfair advantages realized by persons or companies who are potential bidders by reason of a pre-existing relationship to the department or agency.

     Your Committee has amended this measure by:

     (1)  Clarifying that the moneys that are to be deposited in the general fund consist of moneys received by the State for trade missions and goodwill trips and exclude moneys received for payment of booths and participation fees for trade shows, and amending the appropriation accordingly;

     (2)  Making the Comptroller an ex-officio non-voting member of the State Procurement Policy Board; and

     (3)  Making technical, nonsubstantive amendments.

     As affirmed by the record of votes of the members of your Committee on Tourism and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2574, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2574, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Tourism and Government Operations,

____________________________

CLARENCE K. NISHIHARA, Chair