STAND. COM. REP. 565

Honolulu, Hawaii

, 2003

RE: H.B. No. 510

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 510 entitled:

"A BILL FOR AN ACT RELATING TO government,"

begs leave to report as follows:

The purpose of this bill is to establish a system of managed competition in the State and regulate the privatization of government services.

HGEA-AFSCME testified in support of the intent of this measure. The Department of Human Resources Development, Office of Information Practices, and Department of Water of the County of Kauai commented on this measure.

Act 90, Session Laws of Hawaii 2001, attempted to make government more efficient and economical by allowing the Governor and executives of other jurisdictions to use privatization and managed competition as management tools to provide government services more efficiently. However, in a report submitted to the Legislature in 2002, the Legislative Auditor (Auditor) stated that the State is not adequately prepared for privatization or managed competition. The Auditor found that a framework to direct agency efforts was needed and that this framework, should at a minimum, include a privatization authority to ensure that privatization goals are achieved. This measure attempts to establish this framework and incorporates many of the concepts identified by the Task Force on Managed Competition.

However, your Committee understands that some concerns remain regarding the impact this measure may have upon civil service employees. Your Committee also notes that many of the departments had concerns about a paperwork burden that may be realized with the additional monitoring, reporting, and contract review requirements proposed in this bill.

Your Committee has amended this measure by:

(1) Requiring that, effective July 1, 2003, agency determinations on whether services an agency needs or is required to provide are performed more efficiently and economically by public employees or by private contractors be made every odd year;

(2) Requiring that individual departments, not the departments of finance of the State and various jurisdictions, establish the performance standards, quality measures, and procedures to monitor the effectiveness of agency determinations to use agency employees or private contractors to perform the services an agency needs;

(3) Requiring that the directors of finance specify the amount of those actual direct and indirect costs for the past fiscal year that are common to all agencies within their respective jurisdictions that the agencies shall use to measure efficiencies and economies; and

(4) Making technical, nonsubstantive amendments for purposes of clarity, conformity, and style.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 510, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 510, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Labor and Public Employment,

 

____________________________

MARCUS R. OSHIRO, Chair