ITAPS State Legislative Mid-Year Report: Halfway Home

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As a number of states have wrapped up their legislative sessions and completed their budget processes, this is an opportune time to review the Information Technology Alliance for Public Sector (ITAPS) state level advocacy efforts so far this year on behalf of the information and communications technology (ICT) sector.  Here is a mid-year summary of ITAPS’ legislative activity and what remains in play for the fall session in state legislatures around the country:

Anti-NSA Proposals “Code” for Anti-Contracting

At the outset in January,  about a dozen state legislatures saw bills introduced in response to the media attention devoted to the NSA’s bulk data collection activities. One such bill is South Carolina’s H.B. 4795, which would have prohibited the state from “providing material support, participation or assistance in any form to any federal agency that claims the power, by virtue of any federal law, rule, regulation, or order, to collect electronic data or metadata of any person pursuant to any action not based on a warrant that particularly describes the person, place or thing to be searched or seized.”

Unfortunately, the proposals failed to account for the fact that dozens of federal departments and agencies legally collect electronic information on individuals, from the Social Security Administration to the Transportation Security Administration.  Passage of these proposals would have meant that any contractor providing goods and services for these federal agencies would not have been eligible for state or local work where these proposals were adopted. 

ITAPS weighed in on bills in Arizona, California, Missouri, Oklahoma, South Carolina, and Tennessee, pointing out the significant and potential negative implications for companies seeking to make manufacturing and business investments in those states.  Of these bills, only California’s Senate Bill 828 remains active, but it was amended to fully address concerns raised by ITAPS.

New Jersey attempts to pass “Buy American” Bills

ITAPS was one of the first voices to reach out to lawmakers in the New Jersey state legislature on legislation intended to promote domestic firms that actually would have caused more harm than good for U.S. businesses.  The proposals would have required state, local and other public agencies to purchase only U.S. manufactured products.  ITAPS worked with its member companies and other business interests to develop a legislative strategy and outreach in Trenton on the measures harmful impacts.

As a result, both bills were amended to exempt the ICT sector.  The ICT exemption, however, is problematic and requires further refinement as it exempts only those items “that are generally imported into the United States fully assembled.”  That means products that are fully assembled overseas get the exemption, but products assembled in the U.S. with parts manufactured overseas do not.  This could make companies choose between compliance for sale in New Jersey or having American workers assemble the imported parts and components into finished products to comply with U.S. Customs and Border Protection regulations regarding Made in the USA labeling.  ITAPS has pointed out this unfair juxtaposition for companies who wish to be good corporate citizens and preserve eligibility for their products to be acquired in the state.

Momentum behind the bills has waned thanks to strong advocacy by ITAPS and other businesses as legislators learned the proposals could unintentionally isolate New Jersey from U.S.-based businesses that are also competing in the global marketplace, resulting in increased costs for taxpayers in the state.

State IT Governance

Two years ago, Florida defunded its Agency for Enterprise Information Technology and eliminated the state’s chief information officer (CIO) position.  ITAPS lent its support to Florida’s House Bill 7073, calling attention to the increased costs associated with decentralized IT services across multiple state agencies.  Before the bill’s passage, Florida was the only state without a CIO or a centralized IT agency to coordinate, manage, and provide oversight over essential technology projects.

The proposal was signed by Governor Rick Scott in June.  The law established an agency for state technology effective on July 1 and requires the executive director to be a proven, effective administrator with executive level experience in both the public and private sectors in developing and implementing IT strategic planning, enterprise project management, and large-scale consolidation projects.  Bringing back the CIO is a valuable lesson learned when it comes to how the state will more effectively manage over $733 million per year in IT spending.  It’s a step in the right direction that will maximize resources, save taxpayer dollars, and deliver more efficient and effective constituent services for Floridians.

Contract Cost Overruns – New York

New York Senator John DeFrancisco and Assemblyman Herman Farrell, Jr. introduced bills—Senate Bill 7114 and Assembly Bill 9638, respectively—requiring all state, municipal and public authority procurement contracts to include cancellation provisions for expenditures exceeding 10 percent of the original bid price.  Specifically, the bills would have allowed state agencies and local governments to cancel contracts without incurring any penalty or damages on account of such cancellation.

ITAPS registered its opposition on several grounds, including the failure of the legislation to address recovery of the vendor’s reasonable costs and the wholesale absence of language which would address the cause of the cost overage, which may have arisen from new or additional requests by the government agency that were outside the original scope of work. While Senate Bill 7114 moved out of committee, Assembly Bill 9638 did not advance, and neither bill was brought for a vote before the New York legislature adjourned on June 20.

What’s ahead as we enter the fall months?

While states like California, North Carolina and Massachusetts will wrap up their legislative sessions no later than the end of August, other state legislatures will be returning in the months ahead.  With limited exceptions—such as Virginia’s special session on Medicaid expansion and Illinois’ veto session—Michigan, New Jersey, Ohio, and Pennsylvania are among the state legislatures slated for sessions in the fall.  Given the rapid nature these sessions can take, ITAPS will continue to monitor any ICT related activity on the state level and we will continue our advocacy outreach efforts in the months ahead.

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