Hawaii-2022-HB1909-Amended

SECTION 1. The legislature finds that it is important that the state government utilize local businesses and entities whenever practically possible as it is in the best interest of the State to direct its vast internal operational resources toward supporting Hawaii's economic infrastructure. The legislature further finds that one such area of support is using a Hawaii chartered bank or credit union for the utilization of the State's financial services, including the purchasing card program, which is the system of credit cards used by state agencies for state approved purchases of goods and services. The legislature additionally finds that it is of utmost importance to ensure that the money being spent by the State for these necessities stays within local financial institutions to strengthen the State's financial sectors and grow the State's overall economy internally, because most of their investments are in Hawaii to families and businesses.

The legislature also finds that using offshore banks chartered in other areas will direct state resources to the benefit of other entities at the expense of Hawaii's own financial well-being. The legislature additionally finds that bid preferences and other areas of the procurement code afford local businesses a preference insofar as awarding of state contracts, given the concerns and the precedence of bid preferences for local entities. The legislature further finds that by giving a special bid preference to local financial institutions for the State's financial service contracts, like in other areas of the country, it would serve the fairness and balance of the procurement code while protecting the State's interests.

The legislature further finds that in order to satisfy constitutional concerns and ensure the credibility and fiscal worthiness of potential bidders, a bid preference program should be used to address the policy goals of this Act. The legislature finds that this will allow the State to give a preference for locally domiciled financial institutions as described above but also balances other factors to ensure that such services will be conducted with the highest fiduciary duty and service.

The purpose of this Act is to require the state procurement office to give a bid preference to a bank or credit union domiciled in Hawaii to provide services for financial service contracts.

SECTION 2. Section 103D-1002, Hawaii Revised Statutes, is amended to read as follows:

"§103D-1002 Hawaii products[.] and financial services. (a) A purchasing agency shall review all specifications in a bid or proposal for purchase of Hawaii products where these products are available.

(b) All invitations for bids and requests for proposals shall:

(1) Include a description of the products that are listed in the Hawaii products list established pursuant to this section, which may be used to complete the scope of work specified in the invitation for bids or request for proposals; or

(2) Allow as part of the offer, self-certification that the Hawaii products qualify for preference;

provided that the offer may be evaluated along with any other published criteria in the solicitation, including but not limited to considerations such as specific nutritional content or its equivalent, timing of delivery, quality or freshness, and past performance, if applicable.

All Hawaii products in any bid or request for proposal shall be made available for inspection, or additional information may be requested to verify that the Hawaii product meets the minimum specifications.

(c) All persons submitting bids or proposals to claim a Hawaii products preference shall designate in their bids which individual product and its price is to be supplied as a Hawaii product.

(d) Where a bid or proposal contains both Hawaii and non-Hawaii products, then for the purpose of selecting the lowest bid or purchase price only, the price or bid offered for a Hawaii product item shall be decreased by subtracting ten per cent for class I Hawaii product items bid or offered, or fifteen per cent for class II Hawaii product items bid or offered. The lowest total bid or proposal, taking the preference into consideration, shall be awarded the contract unless the bid or offer provides for additional award criteria. The contract amount of any contract awarded, however, shall be the amount of the bid or price offered, exclusive of the preferences.

(e) Upon receipt and approval of application for Hawaii products preference, the administrator shall include within the Hawaii products list, the names of producers and manufacturers in the State who are authorized to supply locally manufactured soil enhancement products to state agencies under subsection (k). The administrator of the state procurement office shall maintain and distribute copies of the list to the purchasing agencies of the various governmental agencies.

(f) Any person not on the Hawaii products list desiring a preference pursuant to this section shall certify the Hawaii product when submitting a response to a solicitation; provided that the person certifies under penalty of sanctions that the offered Hawaii products meet the requirements for the preference.

The procurement officer may request additional information deemed necessary to qualify a product and shall have sole discretion in determining qualification for the preference.

Any offeror whose product is deemed not qualified for the preference may appeal by filing a written request for reexamination of facts to the procurement officer. Upon determining that the offeror is qualified for the preference, the procurement officer shall notify the administrator and the administrator shall place the offeror on the Hawaii products list.

(g) Solicitations shall contain a provision notifying offerors who request application of the preference that in the event of any change that materially alters the offeror's ability to supply Hawaii products, the offeror shall immediately notify the chief procurement officer in writing and the parties shall enter into discussions for the purposes of revising the contract or terminating the contract for convenience.

(h) For the establishment of financial services, the state procurement office shall apply a bid preference for banks or credit unions domiciled in the State in contracts for financial services; provided that the preference shall evaluate, along with any other published criteria in the solicitation, considerations including but not limited to community ratio investments, financial reserves, customer service history within the State, obligations to the State, as well as other criteria determined by the state procurement office or other contracting agency.

[~~(h)~~] (i) Nothing in this section shall limit, restrict, or preclude a Hawaii product from any preferences, set-asides, or criteria that may be applied under section 103D-906, and this section shall operate instead to mutually enhance the purpose of this section and section 103D-906.

[~~(i)~~] (j) This section shall not apply whenever its application will disqualify any governmental agency from receiving federal funds or aid.

[~~(j)~~] (k) Any purchase made or any contract awarded or executed in violation of this section shall be void and no payment shall be made by any purchasing agency on account of the purchase or contract.

[~~(k)~~] (l) For the purposes of this section, "soil enhancement product" means any nonchemical soil preparation, conditioner, or compost mixture designed to supplement aeration or add organic, green waste, or decaying matter to the soil; provided that the term does not include any plant fertilizer intended to stimulate or induce plant growth through chemical means. All state agencies shall include in their solicitations, when required, the soil enhancement products identified on the Hawaii products list pursuant to subsection (e)."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2112.

HOUSE OF REPRESENTATIVES	H.B. NO.	1909
THIRTY-FIRST LEGISLATURE, 2022		H.D. 2
STATE OF HAWAII