Report Title:

High Technology Development Corporation; High Technology Research; Appropriation

Description:

Appropriates funds to the high technology development corporation for the small business innovation research grant program, the small business technology transfer program, and the phase 0 competition assistance Program.

HOUSE OF REPRESENTATIVES

H.B. NO.

3057

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

MAKING AN APPROPRIATION TO THE HIGH TECHNOLOGY DEVELOPMENT CORPORATION.

 

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

SECTION 1. In 1989, the legislature created the Hawaii small business innovation research assistance program under section 206M-15, Hawaii Revised Statutes. Prior to 1989, there were only two fledgling Hawaii small businesses that received federal small business innovation research awards. Since 1989, fifty-six Hawaii companies have won two hundred forty-five small business innovation research grants and have brought to Hawaii approximately $56,500,000 in federal small business innovation research funds, plus $57,500,000 in investments to commercialize proven technologies.

The current annual general fund appropriation of approximately $260,000 has remained relatively the same over the past sixteen years and actually decreased in some years from a high of $400,000. However, the increase in the number of participating Hawaii companies and grants awarded has caused a significant reduction in the amount of funding available from the Hawaii small business innovation research assistance program for recipients of the federal program to one-half or less than the original amount intended by the legislature. Small business innovation research funded start-up projects and companies are an important part of the pipeline that feeds and increases the size and number of research and development companies seeking to commercialize technologies in Hawaii. This program and the efforts of those involved result in a more stable tech-based economy in the State.

Organized as a competition, the federal small business innovation research program provides small companies with the opportunity to test high-risk theories and develop innovative technologies. In the federal small business innovation research program's competitive funding process, ten participating federal agencies issue program solicitations seeking research and development in their respective areas of interests, disciplines, and missions. These federal departments and agencies are required to reserve a portion of their research and development funds for small business innovative research that has potential for commercialization and public benefit. Participating departments and agencies include: the United States Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Transportation, and Homeland Security; the Environmental Protection Agency; the National Aeronautics and Space Administration; and the National Science Foundation. A few of the local technology companies and recipients of both federal small business innovation research assistance program and state small business innovation research assistance program grants include: Hoku Scientific; Oceanit Laboratories; Hoana Medical; High Health Aquaculture; 21st Century Systems; Hawaii Biotech; Innovative Technical Solutions; Akimeka LLC; HawaiiWave High Speed Wireless Networks, LLC; Orincon Hawaii; Kuehnle AgroSystems; W. T. Haraguchi Farm, Inc.; and Referentia, Inc.

On the average, federal grant recipients are eligible to receive up to $100,000 for phase I and up to $750,000 for phase II, depending on the project proposal and federal agency. The smaller one-time grants received through the Hawaii small business innovation research assistance program allows local Hawaii companies to more effectively compete with mainland companies. New research, scientific, and general support jobs are created as companies perfect their technology and proposal submission for phase II awards. Although the immediate objective is to solve problems and allow federal agencies to accomplish their missions, the long term objective for all small business innovation research proposals is to commercialize technologies for private and public benefit, thereby creating attractive and sustainable jobs in the community.

Hawaii's cumulative state investment of $3,700,000 has returned significant benefits making the Hawaii small business innovation research assistance grant program a tremendously worthwhile investment for the State. The ratio of federal funds to state funds is fifteen to one, and the ratio of commercial contracts to state funds is thirty to one. The ratios would be much higher if adequate funding opportunities were available for small businesses to pursue these federal grants, since many small businesses already expend a great amount of their own wealth and resources.

Today, small business innovation research is a $2,000,000,000 federal funding program that encourages small businesses to develop commercially viable technologies or innovations. According to the United States Department of Agriculture, Hawaii companies have won the highest number of United States Department of Agriculture small business innovation research grants than any other state, per capita. This is an excellent testament to the opportunities in Hawaii for diversified agriculture, alternative crops, aquaculture, biotechnology, and much more.

With new infrastructure and projects dedicated to the development of Hawaii's biotechnology and life sciences industry, the high technology development corporation has proposed to extend its current small business innovation research assistance program to include the federal small business technology transfer program. This extension would encourage small companies and researchers at nonprofit research institutions, including research universities and colleges, to work together as a team to move technologies developed in the laboratory to the marketplace and to foster technology based economic development. The five federal departments and agencies that are required to reserve a portion of their research and development funds for small business technology transfer program include the United States Departments of Defense, Energy, and Health and Human Services, the National Aeronautics and Space Administration, and the National Science Foundation.

In addition, the high technology development corporation has proposed to increase the number of new Hawaii technology companies applying for small business innovation research and small business technology transfer program federal grants by expanding its current Hawaii small business innovation research assistance program to include phase 0 competition assistance grants. Phase 0 funds will be used to overcome obstacles faced by technology companies when applying for competitive small business innovation research and small business technology transfer proposal grants. Typical obstacles may include determining whether a concept or idea is truly innovative, appropriate laboratory research, access to and contact with distant collaborators including faculty, researchers, and scientific writers. These phase 0 competition assistance grants will be available to Hawaii companies developing a small business innovation research or small business technology transfer grant proposal. The results will facilitate nationally competitive proposals and assist Hawaii's growing high technology research and development industry niche.

The purpose of this Act is to appropriate funds to the high technology development corporation to increase funding levels necessary to meet the current needs of the Hawaii small business innovation research assistance program and the proposed Hawaii small businesses technology transfer grant program and phase 0 competition assistance program.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000, or so much thereof as may be necessary for fiscal year 2006-2007, to fund the Hawaii small business innovation research assistance program, the small business technology transfer program, and the phase 0 competition assistance program.

SECTION 3. The sum appropriated shall be expended by the high technology development corporation for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2006.

INTRODUCED BY:

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