STAND. COM. REP. NO. 1670

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1071
                                     S.D. 1
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 1071, S.D. 1, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO SECURITIES,"

begs leave to report as follows:

      The purpose of this bill is to allow small companies the
ability to obtain increased access to growth capital by allowing
for a new form of equity financing through the Small Corporate
Offering Registration (SCOR) system.  This would allow small
companies to raise start-up capital, up to $1,000,000, by selling
shares of stock directly to the public after registering shares
under the SCOR system.  

     Testimony in support of this measure was provided by the
Department of Commerce and Consumer Affairs, the Department of
Business, Economic Development, and Tourism (DBEDT), and the
Hawaii Congress on Small Business.  DBEDT also recommended an
amendment for the accredited investor exemption, in order to
provide a vehicle to raise capital through a private placement to
qualified higher net worth individuals and institutions.

     Your Committee has amended the bill to replace its contents
with that of the House companion bill, H.B. No. 830, H.D. 1,
which was passed out of your Committee earlier this session, and
which incorporated an accredited investor exemption substantially
similar to DBEDT's proposed amendment.


 
 
                                 STAND. COM. REP. NO. 1670
                                 Page 2

 
     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1071, S.D. 1, H.D. 1, as amended herein, and
recommends that it pass Third Reading in the form attached hereto
as S.B. No. 1071, S.D. 1, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair