HOUSE OF REPRESENTATIVES	H.B. NO.	987
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO PROCUREMENT FILING FEE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that procurement bid challenges often result in project delays, funding lapses, and project cost increases. These concerns have been partly addressed by the requirement that the department of commerce and consumer affairs' office of administrative hearings process and hear these cases within twenty-one days and issue decisions within forty-five days of the filing of the challenges. However, these proceedings can involve complex issues, multiple litigants, and days or weeks of hearing. To meet these strict deadlines and issue written decisions that can withstand appellate review, the department must assign these cases the highest priority in terms of time and resources. Hearings for other non-procurement cases must be delayed, and the hearings officers must commit substantial time to completing the bid challenge proceedings by the statutory deadlines.

The legislature further finds that even though the department has been tasked with this critical responsibility, it has received no appropriation of funds to defray the costs of these proceedings. As a result, these costs have been indirectly paid for by the license registration fees assessed by the department.

The purpose of this Act is to provide a funding mechanism to partially cover the costs to conduct bid challenge hearings by authorizing the department to assess a non-refundable filing fee upon the party initiating the bid challenge for contracts with an estimated value of $500,000 or more.

SECTION 2. Section 103D-709, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) The party initiating a proceeding falling within subsection (d) shall pay to the department of commerce and consumer affairs a cash or protest bond in the amount of:

(1) $1,000 for a contract with an estimated value of less than $500,000;

(2) $2,000 for a contract with an estimated value of $500,000 or more, but less than $1,000,000; or

(3) One-half per cent of the estimated value of the contract if the estimated value of the contract is $1,000,000 or more; provided that in no event shall the required amount of the cash or protest bond be more than $10,000.

If the initiating party prevails in the administrative proceeding, the cash or protest bond shall be returned to that party. If the initiating party does not prevail in the administrative proceeding, the cash or protest bond shall be deposited into the general fund.

In addition to the bond required in this subsection, the initiating party shall pay to the department of commerce and consumer affairs a non-refundable filing fee of $200 for a contract with an estimated value of $500,000 or more, but less than $1,000,000, or $1,000 for a contract with an estimated value of $1,000,000 or more. Failure to do so shall result in the rejection or dismissal of the request for review. The fee shall be deposited into the compliance resolution fund established pursuant to section 26-9(o) and used to help defray the costs of conducting the administrative proceeding for review."

SECTION 3. New statutory material is underscored.

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

INTRODUCED BY:	_____________________________
	BY REQUEST

Report Title:

Procurement; Filing Fee

Description:

Requires a party initiating a bid challenge to pay the Department of Commerce and Consumer Affairs a non-refundable filing fee for contracts with an estimated value of $500,000 or more.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.