STAND. COM. REP. NO. 1258

Honolulu, Hawaii

RE: H.B. No. 987

H.D. 1

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 Government Operations, to which was referred H.B. No. 987, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish a Procurement Automation System Special Fund; and

(2) Add the Executive Director of the School Facilities Authority as the Chief Procurement Officer for the School Facilities Authority in the Hawaii Public Procurement Code.

Your Committee received testimony in support of this measure from the Department of Accounting and General Services and State Procurement Office.

Your Committee finds that Act 176, Session Laws of Hawaii 2022, authorized the State Procurement Office to develop and administer a procurement automation system and assess a transaction fee on vendors using the system beginning in fiscal year 2024-2025. Your Committee finds, however, that the Legislature did not establish a special fund into which the collected fees can be deposited and accessed by the State Procurement Office to pay for the administration of the system. Therefore, the collected fees are currently being held in trust by the vendor who developed the procurement automation system. The fees in the trust may only be accessed and applied as credit with the current vendor, limiting the State Procurement Office's ability to efficiently expend the funds. This measure will streamline the self-funded model for the procurement automation system, allowing the State to utilize the collected transaction fees in the most effective manner.

Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 987, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 987, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

ANGUS L.K. MCKELVEY, Chair