Report Title:

Hawaii Ingenuity Corporation Charter

Description:

Establishes the Hawaii Ingenuity Corporation Charter. (HB3261 CD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

3261

TWENTY-THIRD LEGISLATURE, 2006

H.D. 1

STATE OF HAWAII

S.D. 2


C.D. 1

A BILL FOR AN ACT

 

RELATING TO INGENUITY CORPORATION CHARTER.

 

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

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

HAWAII INGENUITY CORPORATION CHARTER

§  -1 The legislature finds and declares that:

(1) It is an essential function of government to enhance and protect the quality of public education for Hawaii residents;

(2) Inventors and other creators of intellectual property are an important engine of economic growth;

(3) Intellectual property is one of the only remaining sources of competitive advantage in the global economy;

(4) Teaching innovation techniques in our schools is a wise investment in the State's future prosperity;

(5) Hawaii needs to attract inventors to protect and develop its economy. Protecting labor and environmental standards in Hawaii depends upon increasing or at least maintaining labor and environmental standards nationally and globally;

(6) Whether working independently or employed by corporations, the vast majority of inventors do not have the collective representation, institutional strength, or financial resources necessary to exercise and enforce their property rights; and

(7) Hawaii has the opportunity to become a center for protecting the fruits of American ingenuity so that inventors can fully exercise their constitutional intellectual property rights and, in turn, these rights can be used to forge an anchor for good jobs in a manner that enhances labor and environmental practices nationally and internationally.

§  -2 Definitions. As used in this chapter, unless it otherwise clearly appears from the context:

"Board" means the board of directors of the corporation.

"Corporation" means the Hawaii ingenuity corporation.

§  -3 Establishment; purpose. (a) There is established the Hawaii ingenuity corporation, which shall be a private, for profit, non-stock, membership corporation created by the State to:

(1) Hold and use intellectual and other property;

(2) Create benefits for inventors nationally, labor unions nationally, and public education in Hawaii to promote the teaching of innovation and its application for the common good;

(3) Create and maintain businesses operating at International Labor Organization work standards and United Nations environmental standards, providing innovation education, employment opportunities, and economic development for Hawaii;

(4) Raise global labor and environmental standards and build Hawaii's role as an inventor-friendly state;

(5) Engage in any lawful business that operates upon International Labor Organization labor and United Nations environmental standards and sell, lease, or license goods and services only to business entities meeting International Labor Organization labor standards and United Nations environmental standards;

(6) Enable inventors, labor unions, the American Ingenuity Alliance, and public educators to create a business entity that owns and licenses intellectual and other property;

(7) Attract inventors to Hawaii;

(8) Enable the corporation to negotiate with other corporations on behalf of all the constituency groups on issues of licensing intellectual property, labor, and environmental standards; and

(9) Permit the corporation to collectively bargain and declare that exercising such power on behalf of inventors and labor organizations is an exception to all state anti-trust and anti-competitive practice rules.

(b) Contribution, allocation, or distribution by the corporation of its property or assets to any nonprofit institution shall be deductible from the corporation's income to the same extent as it would from the income of any other for-profit company.

§  -4 General powers of the corporation. The corporation shall have the power to do any lawful acts or things reasonably necessary or desirable for carrying out the above-stated purposes and for protecting the lawful rights and interests of its members in connection therewith.

§  -5 Disposition of assets. Upon its dissolution, assets may be allocated amongst the members pro rata, with one-third going to inventor members as a group; one-third to union members as a group, and the remaining one-third to be divided equally between the Hawaii State Teachers' Association and the University of Hawaii Professional Assembly for allocation by them to programs teaching innovation.

§  -6 Duration. This corporate charter is perpetual unless rescinded by a two-thirds vote of both houses of the legislature.

§  -7 Membership classes and qualifications. (a) There shall be five classes of corporation members:

(1) Educator members;

(2) Inventor members;

(3) Labor union members;

(4) Investor members; and

(5) A managing member.

(b) Qualifications for class membership are as follows:

(1) There shall be two educator members representing:

(A) The Hawaii State Teachers' Association; and

(B) The University of Hawaii Professional Assembly;

(2) An inventor member is any person who licenses to the corporation any intellectual property on which the person holds a patent, trademark, trade name, or copyright;

(3) A labor union member is a member of any labor organization (as defined by United States or Hawaii law) that enters into a contract with the corporation and one or more inventor members for their mutual benefit, including any local, state, regional, national, or amalgamated body;

(4) An investor member is any person or entity that invests real, tangible, or intangible assets in the corporation, other than intellectual property, by contracting with the corporation; and

(5) A managing member is a Hawaii non-profit corporation, determined by the legislature to have the ability and resources to bring together all the corporation member classes to carry out the purposes of this chapter. The initial managing member shall be the American Ingenuity Alliance. The legislature hereby determines that the American Ingenuity Alliance has the ability and resources to bring together all the corporation member classes to carry out the purposes of the corporation.

§  -8 Rights and obligations of member classes. (a) The two educator members shall:

(1) Each appoint one member of the board. The appointment process for each position shall be determined by each respective organization;

(2) Be entitled to a one-third share of the profits derived from inventor or labor union contracts managed by the corporation after expenses incurred by the corporation, including managing member and corporation management fees, costs, and investor return payments, which share shall be divided equally between the two educator members;

(3) Have the fiduciary obligation to oversee the disbursement of the one-third share of the corporation's profits allocated to the educator members, which funds shall be used to promote teaching and learning innovation for the common good; and

(4) Have memberships that shall only expire by act of the legislature.

(b) Inventor members shall:

(1) Have no voting rights in the corporation, other than those granted by the Professional Inventors Alliance or the Living Inventors Hall of Fame;

(2) Be represented on the board by three inventor members. The Professional Inventors Alliance and the Living Inventors Hall of Fame shall each appoint one member to serve a term as a director of the board. The American Ingenuity Alliance shall appoint one member. The appointment process for each position shall be determined by each organization, respectively;

(3) Not include the Professional Inventors Alliance nor the Living Inventors Hall of Fame;

(4) Enter into one or more contracts with and managed by the corporation;

(5) Be entitled to a one-third share of the profits derived from contracts after expenses incurred by the corporation, including managing member and corporation management fees, costs, and investor return payments; and

(6) Have membership that shall expire at the termination of a member's contract. If a member is engaged in several contracts, the membership shall expire at the end of the last contract.

(c) Labor union members shall:

(1) Have no voting rights in the corporation, other than those granted by the American Federation of Labor Congress of Industrial Organizations or the Change to Win Coalition;

(2) Be represented on the board by three labor union members. The American Federation of Labor Congress of Industrial Organizations and the Change to Win Coalition shall each appoint one member to serve on the board. The American Ingenuity Alliance shall appoint one member;

(3) Not include the American Federation of Labor Congress of Industrial Organizations or the Change to Win Coalition;

(4) Enter into one or more contracts with and managed by the corporation;

(5) Be entitled to a one-third share of the profits derived from contracts after expenses incurred by the corporation, including managing member and corporation management fees, costs, and investor return payments; and

(6) Have membership that shall expire at the termination of a member's contract. If a member is engaged in several contracts, membership shall expire at the end of the last member contract.

(d) Investor members shall:

(1) Have no voting rights in the corporation;

(2) Enter into one or more contracts with and managed by the corporation to provide capital for the corporation or any of its members;

(3) Be entitled to investor return payments enumerated in a member contract in exchange for investing capital in the corporation or any of its members' contracts. Investor return payments shall be paid out of contract returns after management fees and costs and before calculating profits to be allocated to the inventor, labor union, and educator members; and

(4) Have membership that shall expire at the termination of a member's contract. If a member is engaged in several contracts, the membership shall expire at the end of the last member contract.

(e) The managing member shall:

(1) Appoint three members to the board of directors:

(A) A representative of a labor organization;

(B) An inventor or representative of an inventor's organization; and

(C) A representative of the managing member, who shall serve as the board chair;

(2) Be removed and replaced by a majority vote of both houses of the legislature;

(3) Identify and solicit members within the various membership classes and facilitate opportunities for members to contract with one another to further the purposes of the corporation; and

(4) Interpret the meaning of the corporation contracts when there is any dispute between members who are engaged in a member contract. Appeal from any interpretation may be made to the entire board of directors. The directors may overturn the managing member's decision by a majority of the votes of the board of directors.

§  -9 Membership meetings. (a) There shall be an annual membership meeting held on the second Wednesday in March, or at any other time determined by the board of directors, so long as one is held approximately every twelve months.

(b) Members shall receive notice not less than ten, nor more than ninety, days in advance of the meeting by any means that provides a written record.

(c) The board of directors shall create the means to permit members to participate from a distance by electronic or other means.

(d) The chair of the board of directors and the chief executive officer shall present an annual report to the members on the corporation's affairs, including a financial report and description of the number and nature of the board's member contracts, including a description of how the contracts meet the board's purposes.

(e) Special meetings of the members may be called by the chair of the board of directors or three directors at any time or shall be called by the chair of the board of directors upon a petition signed by at least fifty per cent of any class of members or twenty five per cent of all members.

§  -10 Member's right to sue. Members shall have the right to sue the board of directors for failure to conduct the business for charter purposes or in the best interests of the members. The right to sue, however, shall only be available after the member has first exhausted an internal appeal process created by the board of directors and overseen by a neutral outside party; provided that the board of directors has created this process. The Hawaii courts shall give the deference to this internal process that they would give any state agency administrative tribunal.

§  -11 Board of directors. There shall be nine board of director members chosen by various constituencies pursuant to this chapter. The directors shall be appointed in the following numbers by the following organizations:

(1) One member by the Hawaii State Teachers' Association;

(2) One member by the University of Hawaii Professional Assembly;

(3) One member by the American Federation of Labor Congress of Industrial Organizations;

(4) One member by the Change to Win Coalition;

(5) One member by the Professional Inventors Alliance;

(6) One member by the members of the Living Inventors Hall of Fame; and

(7) Three members by the managing member, of which:

(A) One member shall represent a labor organization;

(B) One member shall be an inventor or represent an inventor's organization; and

(C) One member shall represent the managing members, who shall serve as the chair of the board of directors.

§  -12 Terms of office. (a) Each member of the board of directors shall be appointed for a term of five years by the director's constituency as provided in this chapter. To stagger the board terms, the initial terms shall be as follows:

(1) For two-year terms: the directors appointed respectively by the Hawaii State Teacher's Association and the Change to Win Coalition;

(2) For three-year terms: the directors appointed respectively by the Professional Inventors Alliance, American Federation of Labor Congress of Industrial Organizations, and the University of Hawaii Professional Assembly;

(3) For four-year terms: the director appointed by the Living Inventors Hall of Fame; and

(4) For five-year terms: the directors appointed by the managing members.

(b) A director of the board may be recalled at any time without cause by formal action by the body appointing the director and replaced by another director to serve out the remainder of the former director's term. A director may serve any number of terms and may be removed from office for cause by a vote of a majority of the remaining directors then in office.

§  -13 Duties of the board of directors. The board of directors shall:

(1) Elect all other officers, including a president and chief executive officer, a secretary, a treasurer, and one or more vice-presidents. These officers may but need not be directors. Staff officers shall be elected each year at the board of director's annual meeting;

(2) Hire, fire, evaluate, and determine compensation for the chief executive officer;

(3) Determine policy for the corporation;

(4) Review corporation member contracts to ensure that they comply with the corporation's purpose, which may include creating criteria for contract evaluation and delegation of the contract review function to staff;

(5) Hold an annual membership meeting;

(6) Operate the corporation to fulfill the purposes of this charter and serve as fiduciaries in the best interests of all the members; and

(7) Create and amend the corporation's bylaws to further the purposes of this charter.

§  -14 Board meetings. (a) The board shall meet monthly, on the second Tuesday of the month, unless rescheduled by the chair of the board.

(b) Meetings may be held in any location convenient to the board of directors or in multiple locations. Directors may participate in the meeting by any electronic or other method that allows each director to speak, hear, and be heard by all the others.

(c) Notice of regular board of directors meetings shall be sent no less than seventy-two hours and no more than thirty days before a meeting. Notice of meetings may be given by any medium that produces a written record.

(d) Notice of any meeting may be waived by directors if a waiver is signed before, at, or after a meeting.

(e) Unanimous board of directors action may be taken without a meeting; provided that all directors sign the resolution noting their agreement.

(f) Notice of special board of directors meetings shall be sent no less than twenty-four hours and no more than thirty days before a meeting. Notice of meetings may be given by any medium that produces a written record.

(g) Special meetings of the board of directors may be called at any time by the chair, or by a notice signed by three directors.

(h) Special meetings of the board of directors or corporation members shall be called by the chair upon a petition signed by at least twenty per cent of any class of members or ten per cent of all members.

§  -15 Board member compensation. The board of directors shall not be paid more than the average annual compensation for the members of University of Hawaii Professional Assembly, plus actual expenses incurred in carrying out the member's duties.

§  -16 Executive committee. The board of directors may delegate its duties to an executive committee made up of its officers. The executive committee may also act on behalf of the board of directors when action is needed between meetings, subject to authorization or rescission at the following board of directors meeting.

§  -17 Officers. (a) The officers of the board shall be elected by the board at its annual meeting. The chief executive officer may be hired on a contract exceeding one year if the board of directors so chooses.

(b) The chief executive officer shall ensure that the corporation's management shall charge no more than reasonable fees and costs to the corporation and member contracts. The fees and costs shall be disclosed timely to contracting members. The chief executive officer shall provide the monthly reports to the board of directors and annual reports to the members and shall have the authority to hire staff and consultants as necessary to carry out the purpose and business of the corporation.

The chief executive officer shall organize transactions in which one or more members contract with outside parties for the mutual benefit of the contracting members and manage the business and assets of the corporation in the interest of all members. The chief executive officer shall negotiate and administer contracts on behalf of members.

The chief executive officer shall also prepare an annual report on the corporation to the legislature. The board of directors and the treasurer shall review the report. The chief executive officer and the treasurer shall sign a statement taking fiduciary responsibility for the veracity of the statements in the annual report to the legislature.

(c) The board shall designate a first vice-president to take over the duties of the president whenever the president is unavailable to chair a meeting or is otherwise incapacitated or unreachable. The board may designate other vice-presidents with whatever duties the board chooses to assign.

(d) The secretary shall maintain all books and records of the corporation and shall be responsible for all required legal filings. The secretary or the president shall have the authority to sign contracts on behalf of the corporation. The secretary shall maintain accurate records of the current membership status of all current and past members. The secretary shall maintain records of the board members' staggered terms of office and provide notice to the board of directors ninety days before each annual meeting of the board member terms that shall expire at that annual meeting.

(e) The treasurer shall maintain and oversee the financial records of the corporation. The treasurer shall make a financial report at every regular meeting of the board of directors and at the membership annual meeting. The treasurer shall prepare the financial report included in the annual report to the legislature.

§  -18 Amendments. Amendments to this charter shall only be made by an Act of the legislature. However, the board of directors may create and amend bylaws to further elaborate the corporation's corporate structure and processes, so long as the bylaws do not conflict with the charter's purposes.

§ -19 Conflict of laws. If there is a conflict between this chapter and chapter 414, this chapter shall control. If this chapter is silent as to a matter addressed by chapter 414, that chapter shall control.

This chapter shall not supersede any existing labor laws of the State. If there is any conflict between the two, the labor law shall prevail."

SECTION 2. This Act shall take effect upon its approval.