HB406

SECTION 1. The legislature finds that continued advancement of technology with the growth of automation and artificial intelligence is poised to fundamentally reshape our local and global economy. Some reports predict that automation may eliminate one-third of the nation’s jobs by 2030, and that as high as forty-five per cent of current business tasks could potentially be automated. As such, rising generations will be required to possess the skills and adaptability to thrive in this new economy. Projections show that approximately sixty-five per cent of students in school will hold jobs that do not exist yet.

The legislature further finds that although Hawaii has one of the lowest unemployment rates in the nation, many existing jobs are lower wage jobs in the visitor industry. Moreover, high housing costs and the high cost of living are outpacing wages. In addition, there are not enough job opportunities in the State for high-wage, skilled workers. Consequently, the United States Census Bureau recently found that there are thirty-seven more people per day who are moving out of Hawaii than are moving into the State.

Given this looming challenge, the legislature finds that the State must develop a strategic, forward-looking approach toward work-based learning to better prepare students for college and their careers. Accordingly, the department of business, economic development, and tourism should be required to develop annual regional economic plans for each county based on the boundaries of development or community plans in each county. The workforce development council, in partnership with the department of education and the University of Hawaii, can use this data to provide K-16 pathways and internship programs in each public and public charter school to match the State's specific industry needs. These pathways and qualified internship programs will serve as the foundation for developing work-based learning opportunities in public schools that reflect high-growth, high-need industries, which are often concentrated in healthcare, technical roles, business and finance, information technology, and management.

Furthermore, the legislature finds that schools and industry partners should be empowered to offer qualified student internship programs. Therefore, qualified internship programs should be exempted from the procurement process.

Accordingly, the purpose of this Act is to:

(1) Require the department of business, economic development, and tourism to develop annual regional economic plans for each county based on the boundaries of the development or community plans in each county;

(2) Exempt qualified internship programs from the procurement process; and

(3) Appropriate funds.

SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201- Regional economic plans. (a) The department of business, economic development, and tourism shall develop annual regional economic plans to provide jobs in urban and rural areas in each county based on the development or community boundaries of each respective county.

(b) These plans shall be published by January 31 annually on the department's website and include a list of regional economic priorities and industry clusters, and jobs within these priorities and industry clusters.

(c) Based on the findings of these regional economic plans, the workforce development council shall consult the department of education and the University of Hawaii to develop and provide K-12 pathways and programs in each public school that:

(1) Emphasize the skills necessary to meet the State's specific industry needs;

(2) Relate to employment in jobs identified by the department as priority jobs, concentrated in healthcare, technical roles, business and finance, information technology, and management; and

(3) Result in a degree or credential that meets entry-level requirements of employers in relevant priority industries.

(d) The priority jobs identified shall be in high-demand, high-growth positions that provide a living wage for an average family of three persons with one working adult.

(e) "Qualified internship programs" means programs that prepare students for jobs that are identified by regional economic plans as a priority in the geographical area.

(f) Schools shall communicate opportunities to enroll in these pathways or qualified internship programs to students and parents.

(g) For budget year 2019-2020 and each budget year thereafter, each participating public school and public charter school may receive up to $1,000 in bonus incentives for each student who has successfully completed a qualified internship program in the preceding budget year. Bonus incentive funds may be used to pay for costs of administering these programs and any testing fees incurred by students in attaining credentials.

(h) The department of education shall maintain records and shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of each regular session beginning in 2020. The report shall include:

(1) Types of credentials being earned and internships being completed;

(2) The schools offering these pathways and programs;

(3) Aggregated demographics of student participants; and

(4) The completion rate of enrolled students.

(i) Qualified internship programs shall be exempted from the Hawaii public procurement code, chapter 103D, should they meet the following criteria, as determined by the department of business, economic development, and tourism in partnership with the department of education and the University of Hawaii. Exempted qualified internship programs shall:

(1) Be aligned with a post-secondary education or employment opportunity;

(2) Value the student’s work equivalent to minimum wage;

(3) Employ a sufficient number of internship case managers to monitor student participation in the internship;

(4) Provide students with pre-internship training or coursework that is designed to prepare the students for the internship; and

(5) Implement adequate safety and supervisory safeguards for the students participating in the internship.”

SECTION 3. Section 103D-102, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Notwithstanding subsection (a), this chapter shall not apply to contracts by governmental bodies:

(1) Solicited or entered into before July 1, 1994, unless the parties agree to its application to a contract solicited or entered into prior to July 1, 1994;

(2) To disburse funds, irrespective of their source:

(A) For grants as defined in section 42F-101, made by the State in accordance with standards provided by law as required by article VII, section 4, of the state constitution; or by the counties pursuant to their respective charters or ordinances;

(B) To make payments to or on behalf of public officers and employees for salaries, fringe benefits, professional fees, or reimbursements;

(C) To satisfy obligations that the State is required to pay by law, including paying fees, permanent settlements, subsidies, or other claims, making refunds, and returning funds held by the State as trustee, custodian, or bailee;

(D) For entitlement programs, including public assistance, unemployment, and workers' compensation programs, established by state or federal law;

(E) For dues and fees of organizations of which the State or its officers and employees are members, including the National Association of Governors, the National Association of State and County Governments, and the Multi-State Tax Commission;

(F) For deposit, investment, or safekeeping, including expenses related to their deposit, investment, or safekeeping;

(G) To governmental bodies of the State;

(H) As loans, under loan programs administered by a governmental body; and

(I) For contracts awarded in accordance with chapter 103F;

(3) To procure goods, services, or construction from a governmental body other than the University of Hawaii bookstores, from the federal government, or from another state or its political subdivision;

(4) To procure the following goods or services which are available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State:

(A) Services of expert witnesses for potential and actual litigation of legal matters involving the State, its agencies, and its officers and employees, including administrative quasi-judicial proceedings;

(B) Works of art for museum or public display;

(C) Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, magnetic, or electronic form;

(D) Meats and foodstuffs for the Kalaupapa settlement;

(E) Opponents for athletic contests;

(F) Utility services whose rates or prices are fixed by regulatory processes or agencies;

(G) Performances, including entertainment, speeches, and cultural and artistic presentations;

(H) Goods and services for commercial resale by the State;

(I) Services of printers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State's or counties' bonds;

(J) Services of attorneys employed or retained to advise, represent, or provide any other legal service to the State or any of its agencies, on matters arising under laws of another state or foreign country, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services are expected to be performed outside this State;

(K) Financing agreements under chapter 37D; [~~and~~]

(L) Any other goods or services which the policy board determines by rules or the chief procurement officer determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State; and

(M) Qualified internship programs as defined in chapter 201- ; and

(5) Which are specific procurements expressly exempt from any or all of the requirements of this chapter by:

(A) References in state or federal law to provisions of this chapter or a section of this chapter, or references to a particular requirement of this chapter; and

(B) Trade agreements, including the Uruguay Round General Agreement on Tariffs and Trade (GATT) which require certain non-construction and non-software development procurements by the comptroller to be conducted in accordance with its terms."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 for the department of business, economic development, and tourism to develop regional economic plans pursuant to section 2 of this Act. The appropriation shall be divided between $300,000 for administrative costs and $200,000 for school incentive bonuses pursuant to section 2 of this Act.

The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2019.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	406
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII