SR2

WHEREAS, the hydrogen investment capital special fund, section 211F-5.7, Hawaii Revised Statutes, was created by Act 240, Session Laws of Hawaii 2006, to provide seed capital for and venture capital investments in private sector and federal projects for research, development, testing, and implementation of the Hawaii renewable energy program; and

WHEREAS, the hydrogen investment capital special fund was provided with an appropriation of $10,000,000, pursuant to Act 240, Session Laws of Hawaii 2006, section 10, and was placed under the jurisdiction of the Hawaii strategic development corporation, chapter 211F, Hawaii Revised Statutes, which is administratively attached to the Department of Business, Economic Development, and Tourism; and

WHEREAS, Act 240, Session Laws of Hawaii 2006, established the Hawaii renewable hydrogen program, codified as section 196‑10, Hawaii Revised Statutes, which relates to the hydrogen investment capital special fund; and

WHEREAS, the Department of Business, Economic Development, and Tourism issued a request for proposals for potential managers of the hydrogen capital investment special fund and established an evaluation committee to review bids submitted and to make a recommended on which bidder should be awarded the contract; and

WHEREAS, the evaluation committee reviewed submitted bids and ranked three bidders, based on criteria established in the request for proposals, from highest to lowest as follows: (1) Kolohala Holdings LLP (score of 255); (2) Enterprise Honolulu (score of 243); and (3) H2 Energy LLC (score of 234.5); and

WHEREAS, in August 2007, in spite of the evaluation committee's recommendation, the Director of Business, Economic Development, and Tourism selected an entity known as H2 Energy LLC to manage the hydrogen investment capital special fund; and

WHEREAS, H2 Energy LLC was the lowest ranking bidder for the contract; and

WHEREAS, the Senate Committee on Tourism and Government Operations held an informational briefing on September 4, 2007, to review the procurement procedures of the request for proposals for the awarding of the contract that was awarded to H2 Energy LLC; and

WHEREAS, by letter dated September 25, 2007, the State Procurement Office ordered the Director of Business, Economic Development, and Tourism, who is the procurement officer of the Department of Business, Economic Development, and Tourism, to "rescind" the selection of H2 Energy LLC, based on its review of the procurement process, which concluded that the contract should have been awarded to the highest-ranking bidder based on the internal evaluation committee's evaluation; and

WHEREAS, the informational briefing, though resulting in the rescinding of the selection of H2 Energy LLC, also uncovered possible procurement improprieties that warrant legislative investigation in order to determine whether administrative malfeasance or misfeasance occurred and whether proposed legislation is necessary thereto; and

WHEREAS, there may be other contracts executed by the Department of Business, Economic Development, and Tourism that may have involved the same parties which may provide relevant information concerning possible procurement improprieties; and

WHEREAS, section 21-3, Hawaii Revised Statutes, authorizes the establishment of a legislative investigative committee by a single house resolution, and Rule 14(3) of the Rules of the Senate allow for the establishment of special investigative committees; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2008, that there is established a Senate special investigative committee, pursuant to chapter 21, Hawaii Revised Statutes, to:

(1) Investigate the selection of a manager for the hydrogen investment capital special fund in 2007; and

(2) Inquire into, gather, and analyze information, including other contracts, that may provide relevant information concerning procurement improprieties relating to paragraph (1); and

BE IT FURTHER RESOLVED that the Senate special investigative committee to investigate the selection of a manager for the hydrogen investment capital special fund shall be chaired by the Vice Chair of the Senate Committee on Tourism and Government Operations; and

BE IT FURTHER RESOLVED that the membership of the Senate special investigative committee to investigate the selection of a manager for the hydrogen investment capital special fund be composed of four members, including the Chair, to be appointed by the President of the Senate; and

BE IT FURTHER RESOLVED that the Senate special investigative committee to investigate the selection of a manager for the hydrogen investment capital special fund shall have every power and function allowed to an investigating committee by law, including without limitation the power to:

(1) Adopt rules for the conduct of its proceedings;

(2) Issue subpoenas requiring the attendance and testimony of witnesses and subpoenas duces tecum requiring the production of books, documents, records, papers, or other evidence in any matter pending before the investigative committee;

(3) Hold hearings appropriate for the performance of its duties, at such times and places as the investigative committee determines;

(4) Administer oaths and affirmations to witnesses at hearings of the investigative committee;

(5) Report or certify instances of contempt as provided in section 21-14, Hawaii Revised Statutes;

(6) Determine the means by which a record shall be made of its proceedings in which testimony or other evidence is demanded or adduced;

(7) Provide for the submission, by a witness's own counsel and counsel for another individual or entity about whom the witness has devoted substantial or important portions of the witness's testimony, of written questions to be asked of the witness by the chair; and

(8) Exercise all other powers specified under chapter 21, Hawaii Revised Statutes, with respect to investigative committees; and

BE IT FURTHER RESOLVED that the Senate President from time to time, may refer to the Senate special investigative committee to investigate the selection of a manager for the hydrogen investment capital special fund specific matters that are within the scope of the investigative committee's jurisdiction; and

BE IT FURTHER RESOLVED that the Senate special investigative committee shall submit its written findings and recommendations to the Legislature prior to the convening of the Regular Session of 2009; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor, the President of the Senate, the Director of Business, Economic Development, and Tourism, and the Administrator of the State Procurement Office.

	OFFERED BY:	_____________________________

Report Title:

Special Senate Investigative Committee; Procurement

THE SENATE	S.R. NO.	2
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII