Report Title:

Capital Investments; State Private Investment Fund

Description:

Authorizes $100,000,000 in tax credits to the Hawaii strategic development corporation for the purposes of Act 215, SLH 2004.

THE SENATE

S.B. NO.

1695

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to capital investments.

 

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

SECTION 1. The legislature finds that Act 215, Session Laws of Hawaii 2004, serves an important public purpose by answering the need to increase venture capital and expand the growth of commerce in the State. A critical shortage of seed and venture capital resources exists in the State, and that shortage is impairing the growth of commerce in the State. A need exists to increase the availability of venture equity capital for emerging, expanding, relocating, and restructuring enterprises in the State. An increase in return-driven, venture capital investments in such enterprises in the State will help to diversify the State's economic base. The program will also benefit Hawaii's local venture capital companies by helping them build strong track records that will also help them attract additional capital. Act 215 provides significant advances in capital formation for Hawaii's emerging technology firms and expansion-oriented companies by providing contingent tax credits to be used by the Hawaii strategic development corporation to secure loans undertaken by the corporation to invest in venture capital funds.

The purpose of this Act is to increase and authorize the issuance of the credits in the amount of $100,000,000 to the corporation, to authorize the corporation to extend guarantees and incur debt, and to authorize the corporation to transfer the credits as needed.

SECTION 2. The corporation is issued tax credits in the amount of $100,000,000 and is authorized to freely transfer those credits pursuant to section 211G-12, Hawaii Revised Statutes, to carry out the provisions of this Act.

The corporation shall limit the transfer of tax credits that may be claimed and used to reduce the tax otherwise imposed by chapter 235 or 241 for one fiscal year (including any tax credits that are carried over by a taxpayer from a prior fiscal year and used to reduce taxes otherwise imposed in the current fiscal year, as permitted in section 211G-12(g), Hawaii Revised Statutes, to not more than an aggregate total of $20,000,000 per fiscal year.

SECTION 3. The corporation is authorized to extend financial guarantees pursuant to section 211G-13, Hawaii Revised Statutes.

SECTION 4. The corporation is authorized to incur indebtedness in the amount of $100,000,000 or whatsoever amount of credits is issued to the corporation pursuant to section 211G-14, Hawaii Revised Statutes, to carry out the provisions of this Act.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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