STAND. COM. REP. NO. 353________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 770
                                     H.D. 1




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

Sir:

     Your Committee on Economic Development and Business
Concerns, to which was referred H.B. No. 770 entitled: 

     "A BILL FOR AN ACT MAKING AN APPROPRIATION TO MATCH FEDERAL
     FUNDS FOR THE ESTABLISHMENT OF MANUFACTURING EXTENSION
     PROGRAMS,"

begs leave to report as follows:

     The purpose of this bill is to appropriate funds to
establish manufacturing extension programs in the State.

     The Chair of the Office of Hawaiian Affairs' Government
Affairs and Sovereignty Committee, the Operations Manager for
Industry Network Corporation, the Hawaii Food Manufacturers
Association, and Arturo's submitted testimony in support of the
measure.  The Department of Business, Economic Development, and
Tourism submitted testimony indicating its support for the
measure so long as it does not adversely affect its Biennium
Executive Budget.

     Manufacturing extension programs have been instrumental in
assisting small- and medium-sized businesses in improving their
production and marketing capabilities.  In fact, there are many
small- and medium-sized businesses in the State that are eligible
for manufacturing extension program assistance.  Your Committee
recognizes that the Industry Network Corporation, the designee of
the federal Manufacturing extension partnership funds in Hawaii,
passed its annual review and received $686,534 for 1999 from the
federal government; however, these funds must be matched by state

 
 
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funds.  It is your Committee's belief that this program is an
excellent way of getting the most for our state dollars, so it is
critical that these federal dollars be matched.

     Your Committee has amended this bill by changing the amount
of the appropriation to $1 to facilitate further deliberation on
the financial aspect of the bill.

     As affirmed by the record of votes of the members of your
Committee on Economic Development and Business Concerns that is
attached to this report, your Committee is in accord with the
intent and purpose of H.B. No. 770, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 770, H.D. 1, and be referred to the Committee
on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development and Business
                                   Concerns,



                                   ______________________________
                                   ROBERT N. HERKES, Chair