Report Title:

Privatization

 

Description:

Permits state or county officials to contract with private entities to provide goods, services, or construction to be financed by public funds when they can be provided at lower costs and in equivalent or better quality than that which could be provided by a government entity.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1578

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PRIVATIZATION.

 

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

SECTION 1. The legislature recognizes the dynamic nature of social and economic conditions and the impossibility of foreseeing all present and future applications of legislation when it is enacted. Consistent with this recognition, the legislature finds that the awareness and understanding of the concept of "privatization" was not adequate at the time the majority of Hawaii's civil service laws were enacted, and that the application of current laws to issues surrounding privatization does not necessarily reflect the public policy appropriately established by the legislature. As a result, further action by the legislature is essential.

In carefully considering all competing interests on privatization, the legislature finds that the predominant interest must be providing Hawaii's citizens with the greatest value for their tax dollars and that all other interests, however worthy, are necessarily subordinate. As custodians of the public trust, we owe our citizens the highest quality of government- provided goods, services, and construction at the lowest possible costs.

The legislature finds that Hawaii's civil service law is intended to apply to the employment process within state and county governments and has no application to issues of privatization. If sections 76-16 and 76-77, Hawaii Revised Statutes, are broadly interpreted to apply civil service law to anything other than employees of the State and counties, we create an untenable situation in which all goods, services, and construction for the public benefit must be evaluated on a case- by-case basis to determine, often arbitrarily and capriciously, whether they are subject to civil service law. To say that this finding will subject the State to the "spoils system" makes a mockery of the hard work the legislature has done in recent years to amend Hawaii's procurement code. The two ways government provides goods, services, and construction to its citizens are through civil service and procurement; and responsible administration in both is the key to eliminating political favoritism and inferior performance.

In establishing guidelines for privatization, the legislature finds a lack of acceptable standards among those commonly applied. These include "customarily and historically provided by civil servants", "new government programs performing new functions", and "bad faith", all of which have little or no relevance to properly determining whether functions and services should be provided by the government or private sector. This Act is intended to provide clear and simple guidelines for making such determinations.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

PRIVATIZATION

§   -1 Scope and application. This chapter is intended to preempt and supersede all other state law with regard to determining whether goods, services, or construction, funded by the State or any of its counties should be provided by the government or private sector. After this determination is made pursuant to this chapter, civil service and procurement laws shall be applied, as appropriate, to implement the determination.

§   -2 Standards for determination. (a) Notwithstanding any law to the contrary, any state or county official in whom appropriate authority is vested by law shall be allowed to contract with a private entity to provide goods, services, or construction to be financed by public funds when there is a reasonable basis to believe that the goods, services, or construction can be provided at lower costs and in equivalent or better quality than that which could be provided by a government entity.

(b) In the determination made pursuant to this section, the state or county official shall consider whether contracting with the private entity will jeopardize the government's ability to provide the goods, services, or construction in the event that the contract becomes unprofitable or impossible for a private entity to perform.

(c) For purposes of this chapter, a "private entity" is any individual, company, or organization that is not an employee or agency within the federal, state, or county government.

(d) Except as provided in this chapter, and notwithstanding any other law to the contrary, nothing, including chapters 46, 76, and 77, and customary or historical past practices, shall be deemed to prevent, restrict, diminish, condition, limit, or otherwise qualify the authority of the State or a county to enter into a contract with a private entity for the provision of goods, services, or construction that were customarily and historically performed by persons or positions in the civil service, or functionally attributed to a government agency or program; provided that any public employee displaced herein shall be protected by chapters 76 and 77."

SECTION 3. If any provision of this Act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

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

INTRODUCED BY:

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