STAND. COM. REP. NO. 354

Honolulu, Hawaii

RE: S.B. No. 425

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Labor and Technology, to which was referred S.B. No. 425 entitled:

"A BILL FOR AN ACT RELATING TO QUALIFIED COMMUNITY REHABILITATION PROGRAMS,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify that the civil service exemption for personal service contracts for building, custodial, and grounds maintenance services with qualified community rehabilitation programs shall not cost more than $850,000 in the aggregate per private person or entity, regardless of the number of contracts or qualified community rehabilitation programs utilized for the personal service.

Your Committee received testimony in support of this measure from the Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO; Hawaii State AFL-CIO; and United Public Workers, AFSCME Local 646, AFL-CIO.

Your Committee finds that the intent behind establishing a limited exemption allowing private contracts for certain services originally intended as civil service with qualified community rehabilitation programs has been abused. Rather than applying the $850,000 price cap in the aggregate, as was intended, state departments are applying the cap per contract or program, facilitating the excessive privatization and outsourcing of these services. In addition to taking jobs that should go to state or county employees, this overreliance on outsourcing also disincentivizes state departments from adequately staffing the civil workforce. To restore the balance between employment opportunities for individuals with disabilities and those for civil servants, this measure clarifies that the price cap must be applied in the aggregate for the personal service being contracted.

Your Committee has amended this measure by:

(1) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(2) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Labor and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 425, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 425, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

HENRY J.C. AQUINO, Chair