STAND. COM. REP. NO. 1394-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2420
                                     S.D. 2
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred S.B. No.
2420, S.D. 2, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TECHNOLOGY,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Allow the High Technology Development Corporation
          (HTDC) to issue special purpose revenue bonds and
          special facility revenue bonds for the development of
          high technology projects;

     (2)  Provide tax credits to encourage research and
          development for intellectual properties;

     (3)  Allow the Board of Trustees of the Employees'
          Retirement System (ERS) to invest ten percent of ERS
          funds in qualified technology businesses;

     (4)  Appropriate funds for educational programs under the
          Department of Education, the Pacific Center for
          Advanced Technology Training, and the University of
          Hawaii;

     (5)  Exempt the members of the Governor's Special Advisory
          Council for Technology Development from the Senate
          confirmation process and from the need to file a
          disclosure of financial interests with the State Ethics
          Commission;


 
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     (6)  Develop partnerships between the Hawaii Tourism
          Authority and Hawaii's business community to promote
          the State as a place to do high technology business;

     (7)  Give increased autonomy and authority to HTDC over its
          fiscal and personnel matters;

     (8)  Establish the Hawaii Venture Capital Technology
          Revolving Fund;

     (9)  Require HTDC to establish programs for seed capital
          assistance, venture capital assistance, and capital
          access;

    (10)  Put the Chief Executive Officer of HTDC, the Executive
          Director of the Natural Energy Laboratory of Hawaii
          Authority (NELHA), and the President of the Hawaii
          Strategic Development Corporation (HSDC) on each
          others' boards; and

    (11)  Require the Department of Business, Economic
          Development, and Tourism and HTDC to report on the
          Hawaii Capital Loan Program.

     The Governor's Special Assistant for Technology Development,
HTDC, and Hawaii Technology Trade Association supported this
bill.  The Department of Budget and Finance, the Department of
Taxation, ERS, and the Tax Foundation of Hawaii commented on this
bill.

     Upon further consideration, your Committee has amended this
bill by:

     (1)  Deleting provisions allowing HTDC to issue special
          purpose revenue bonds and special facility revenue
          bonds for the development of high technology projects;

     (2)  Changing the provisions that place the chief executive
          officer of HTDC, the executive director of NELHA, and
          the president of HSDC on each others' boards such that
          an appointed member of each of those organizations'
          boards is included on each others' boards, rather than
          the specified officers;

     (3)  Clarifying that the ERS may invest in Hawaii high
          technology businesses or venture capital investments
          into which, in the informed opinion of its Board of
          Trustees, it is prudent to invest ERS funds;

     (4)  Reducing all the appropriations to blank amounts; and


 
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     (5)  Making numerous technical, nonsubstantive changes for
          purposes of style and clarity, and to correct drafting
          errors.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2420, S.D. 2, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2420,
S.D. 2, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair