REPORT TITLE:
HTDC


DESCRIPTION:
Repeals HTDC, HSDC, NELHA, Hawaii INC., and PICHTR.  Creates a
new HTDC chapter, administratively attached to UH, to oversee
HTDC, HSDC, and NELHA; single HTDC board assumes power and duties
of former HSDC and NELHA boards; HTDC board of 9 members, with
the special advisor for technology development to serve as
chairperson; duties of HSDC and NELHA under authority of HTDC;
HSDC revolving fund and NELHA special fund under authority of
HTDC; exempts HTDC from special fund reimbursements and
procurement laws and authorizes HTDC ownership of patents,
copyrights, and other rights developed under HTDC, provisions
comparable to those of RCUH.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2708
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE HIGH TECHNOLOGY DEVELOPMENT CORPORATION.



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

 1      SECTION 1.  The legislature finds that the State has a
 
 2 number of agencies responsible for the development of technology,
 
 3 and that these agencies provide similar or overlapping functions
 
 4 that are confusing and may actually hinder the development of new
 
 5 businesses unsure of where to turn for information and
 
 6 assistance.
 
 7      The legislature further finds that in today's new economy,
 
 8 innovation and speed of response are key components to successful
 
 9 business development, and any jurisdiction that does not respond
 
10 accordingly will be at a disadvantage in attracting new
 
11 businesses, particularly those based on technology.
 
12      The purposes of this Act are to:
 
13      (1)  Repeal the current statutes for the high technology
 
14           development corporation, the Hawaii strategic
 
15           development corporation, and the natural energy
 
16           laboratory of Hawaii authority:
 
17      (2)  Reestablish these three agencies under a high
 
18           technology development corporation with additional
 
19           autonomy and authority;
 

 
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 1      (3)  Repeal the Hawaii Telecommunications and Information
 
 2           Industries Act, which is no longer relevant; and
 
 3      (4)  Repeal the statute concerning the Pacific international
 
 4           center for high technology research, as this entity has
 
 5           been incorporated as a nonprofit, private agency.
 
 6      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
 7 a new chapter to be appropriately designated and to read as
 
 8 follows:
 
 9                             "CHAPTER
 
10              HIGH TECHNOLOGY DEVELOPMENT CORPORATION
 
11                    PART I.  GENERAL PROVISIONS
 
12      § -1 Definitions.  As used in this chapter, unless the
 
13 context clearly requires otherwise:
 
14      "Board" means the board of directors of the development
 
15 corporation established in section    -3, and any successor
 
16 thereto.
 
17      "Bonds" means revenue bonds issued under this chapter and
 
18 shall include notes, other instruments of indebtedness, and
 
19 refunding bonds.
 
20      "Cost" means the total cost in carrying out all undertakings
 
21 that the development corporation deems reasonable and necessary
 
22 for the development of a project, industrial park, or research
 
23 and technology park, including but not limited to the cost of
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 studies, surveys, plans, and specifications, architectural,
 
 2 design, engineering, or any other special related services; the
 
 3 cost of site preparation and development, demolition,
 
 4 construction, reconstruction, rehabilitation, and improvement;
 
 5 the cost of financing the project, industrial park, or research
 
 6 and technology park, including interest on bonds issued to
 
 7 finance the project, industrial park, or research and technology
 
 8 park from the date thereof to the estimated date of completion of
 
 9 the project, industrial park, or research and technology park as
 
10 determined by the board; the cost of an allocable portion of the
 
11 administrative and operating expenses of the development
 
12 corporation related to the development of the project, industrial
 
13 park, or research and technology park; and the cost of indemnity
 
14 and surety bonds, premiums on policies of insurance, legal fees,
 
15 and fees and expenses of trustees, depositories, and paying
 
16 agents for the bonds, and for the issuance of letters of credit
 
17 or other banking arrangements whether for the development
 
18 corporation or a qualified person; all as the development
 
19 corporation shall deem necessary.
 
20      "Development corporation" means the high technology
 
21 development corporation established in section    -2.
 
22      "Direct investment" means an investment by the corporation
 
23 in qualified securities of an enterprise to provide capital to an
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 enterprise.
 
 2      "Economic development project" means an endeavor related to
 
 3 industrial, commercial, or advanced technology-based agricultural
 
 4 enterprise.  Economic development project shall not include that
 
 5 portion of an endeavor devoted to the construction of housing.
 
 6      "Enterprise" means a person with a place of business in
 
 7 Hawaii that is, or proposes to be, engaged in business in Hawaii,
 
 8 provided that the endeavor shall not be devoted to the sale of
 
 9 goods at retail, construction of housing, or tourism-related
 
10 services.
 
11      "High technology" means emerging industries that are
 
12 technology-intensive, including but not limited to electronics
 
13 and biotechnology.
 
14      "Industrial park" means a tract of real property determined
 
15 by the board as being suitable for use as building sites for
 
16 projects by a group of enterprises engaged in industrial,
 
17 processing, or manufacturing enterprises for high technology,
 
18 including research, training, technical analyses, software
 
19 development, and pilot plant or prototype product development,
 
20 and may include the installation of improvements to the tract
 
21 incidental to the use of real property as an industrial park,
 
22 such as water, sewer, sewage and waste disposal, and drainage
 
23 facilities, sufficient to adequately service projects in the
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 industrial park, and provision of incidental transportation
 
 2 facilities, power distribution facilities, and communication
 
 3 facilities.  Industrial parks shall not include any buildings or
 
 4 structures of any kind except for buildings or structures
 
 5 incidental to improvements to the industrial park.
 
 6      "Laboratory" means the natural energy laboratory of Hawaii
 
 7 established by section    -71.
 
 8      "Minority-owned businesses" means businesses at least fifty
 
 9 per cent owned, controlled, and managed by socially or
 
10 economically disadvantaged persons.
 
11      "Person" means a sole proprietorship, partnership, joint
 
12 venture, limited liability company, corporation, or other
 
13 association of persons organized for commercial or industrial
 
14 purposes.
 
15      "Professional investor" means any bank, bank holding
 
16 company, savings institution, trust company, insurance company,
 
17 investment company registered under the Federal Investment
 
18 Company Act of 1940, financial services loan company, pension or
 
19 profit-sharing trust or other financial institution or
 
20 institutional buyer, licensee under the Federal Small Business
 
21 Investment Act of 1958, or any person, partnership, or other
 
22 entity of whose resources a substantial amount is dedicated to
 
23 investing in securities or debt instruments and whose net worth
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 exceeds $250,000.
 
 2      "Project" means any combination of land and buildings and
 
 3 other improvements thereon for use in, but not limited to:
 
 4      (1)  Industrial, processing, or manufacturing enterprises
 
 5           for high technology that are located in an industrial
 
 6           park; and
 
 7      (2)  Research, development, demonstration, processing, or
 
 8           manufacturing activities or enterprises utilizing or in
 
 9           support of the utilization of natural resources and
 
10           geothermal energy that are located in a research and
 
11           technology park;
 
12 and acquired, constructed, reconstructed, rehabilitated,
 
13 improved, altered, or repaired by or on behalf of the development
 
14 corporation.
 
15      "Project agreement" means any lease, sublease, loan
 
16 agreement, conditional sale agreement, or other similar financing
 
17 contract or agreement, or any combination thereof entered into
 
18 under this chapter by the development corporation, including the
 
19 financing from the proceeds of bonds of a project, industrial
 
20 park, or research and development park.
 
21      "Public agency" means any office, department, board,
 
22 commission, bureau, division, public corporation, agency, or
 
23 instrumentality of the federal, state, or county government.
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1      "Qualified person" means any individual, partnership,
 
 2 corporation, limited liability company, public agency, or any
 
 3 combination or association of the foregoing, possessing the
 
 4 competence, expertise, experience, and resources, including
 
 5 financial, personnel, and tangible resources, required for the
 
 6 purposes of a project and any other qualifications that may be
 
 7 deemed desirable by the development corporation in administering
 
 8 this chapter and which enters into a project agreement with the
 
 9 development corporation.
 
10      "Qualified security" means any note, stock, treasury stock
 
11 bond, debenture, evidence of indebtedness, certificate of
 
12 interest or participation in any profit-sharing agreement,
 
13 preorganization certificate of subscription, transferable share,
 
14 investment contract, certificate of deposit for a security,
 
15 certificate of interest or participation in a patent or patent
 
16 application, or in royalty or other payments under such a patent
 
17 or application, or, in general, any interest or instrument
 
18 commonly known as a "security" or any certificate for, receipt
 
19 for, or option, warrant, or right to subscribe to or purchase any
 
20 of the foregoing.
 
21      "Real property" means lands, structures, and interests
 
22 therein, and natural resources including water, minerals, and all
 
23 things connected with land, including lands under water and
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 riparian rights, space rights, air rights, and any and all other
 
 2 things and rights usually included within the term.  Real
 
 3 property also means any and all interests in the property less
 
 4 than fee title, such as leasehold interests, easements,
 
 5 incorporeal hereditaments, and every estate, interest, or right,
 
 6 legal or equitable, including terms for years and liens thereon
 
 7 by way of judgments, mortgages, or otherwise.
 
 8      "Research advisory committee" means the research committee
 
 9 that is advisory to the board and is established by section
 
10    -73 and any successor thereto.
 
11      "Research and technology park" means a tract of real
 
12 property determined by the board as being suitable for use as
 
13 building sites for projects engaged in research, development,
 
14 demonstration, processing, or manufacturing activities or retail
 
15 or commercial enterprises utilizing or in support of the
 
16 utilization of natural resources or geothermal energy.  This
 
17 includes, but is not limited to, research, commercialization,
 
18 training, education, technical analyses, pilot plant, or
 
19 prototype product development, and may include the installation
 
20 of improvements to tracts incidental to the use of real property
 
21 as a research and technology park, such as water, sewer, sewage
 
22 and waste disposal, and drainage facilities, sufficient to
 
23 adequately service projects in the research and technology park,
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 and provision of incidental transportation facilities, power
 
 2 distribution facilities, and communication facilities.
 
 3      "Seed capital" means financing provided for the earliest
 
 4 stage of business development, including but not limited to
 
 5 developing a working prototype, preparing a business plan,
 
 6 performing an initial market analysis, or organizing a management
 
 7 team.
 
 8      "Venture capital investment" means any of the following
 
 9 investments in a business:
 
10      (1)  Common or preferred stock and equity securities without
 
11           a repurchase requirement for at least five years;
 
12      (2)  A right to purchase stock or equity securities;
 
13      (3)  Any debenture or loan, whether or not convertible or
 
14           having stock purchase rights, which are subordinated,
 
15           together with security interests against the assets of
 
16           the borrower, by their terms to all borrowings of the
 
17           borrower from other institutional lenders, that is for
 
18           a term of not less than three years, and that has no
 
19           part amortized during the first three years; and
 
20      (4)  General or limited partnership interests.
 
21      § -2 High technology development corporation;
 
22 establishment; purpose.(a)  There is established the high
 
23 technology development corporation, which shall be a public body
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 corporate and politic and an instrumentality and agency of the
 
 2 State.  The development corporation shall be placed within the
 
 3 University of Hawaii for administrative purposes, pursuant to
 
 4 section 26-35.
 
 5      (b)  The purpose of the development corporation shall be to
 
 6 facilitate the growth and development of the commercial high
 
 7 technology industry in Hawaii.
 
 8      §   -3  Board of directors; appointment.(a)  The governing
 
 9 body of the development corporation shall consist of a board of
 
10 directors having nine voting members.  Four of the members shall
 
11 be appointed by the governor for staggered terms pursuant to
 
12 section 26-34, selected on the basis of their knowledge,
 
13 interest, and proven expertise in, but not limited to, one or
 
14 more of the following fields:  finance, commerce and trade,
 
15 corporate management, marketing, economics, engineering, science,
 
16 telecommunications and other high technology fields, energy
 
17 management, real estate development, property management,
 
18 aquaculture, and ocean science.  Of the members appointed by the
 
19 governor, one member shall be appointed from a list of nominees
 
20 provided by the speaker of the house of representatives and one
 
21 member shall be appointed from a list of nominees provided by the
 
22 president of the senate.  All appointed members of the board
 
23 shall continue in office until their respective successors have
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 been appointed.  The director of business, economic development,
 
 2 and tourism, the director of finance, the president of the
 
 3 University of Hawaii, and the executive director of the Research
 
 4 Corporation of the University of Hawaii, or their designated
 
 5 representatives, shall serve as ex officio voting members of the
 
 6 board.  The special advisor for technology development appointed
 
 7 pursuant to section 27-41 shall serve as the chairperson.  The
 
 8 board shall elect other officers that it deems necessary.
 
 9      (b)  The members of the board appointed under subsection (a)
 
10 shall serve without compensation, but may be reimbursed for
 
11 expenses, including travel expenses, incurred in the performance
 
12 of their duties.
 
13      (c)  The board shall appoint a chief executive officer, who
 
14 shall serve at the pleasure of the board and shall be exempt from
 
15 chapters 76 and 77.  The board shall set the salary and duties of
 
16 the executive officer.
 
17      (d)  The board may delegate to its chief executive officer,
 
18 staff, or others those functions and powers that the board deems
 
19 necessary or appropriate, including but not limited to the
 
20 oversight and supervision of employees of the corporation.
 
21      (e)  The board shall appoint a management advisory committee
 
22 for each industrial park, research and technology park, and
 
23 project governed by the board.  Each committee shall have five
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 members, who shall serve without compensation but may be
 
 2 reimbursed for expenses incurred in the performance of their
 
 3 duties.  The members shall be drawn from fields of activity
 
 4 related to each project or park.
 
 5      (f)  A board member shall not participate in any corporation
 
 6 decision to invest in, purchase from, sell to, borrow from, loan
 
 7 to, contract with, or otherwise deal with any person with whom or
 
 8 entity in which the board member has a substantial financial
 
 9 interest.
 
10      § -4 Meetings of the board.  (a)  The meetings of the
 
11 board shall be open to the public as provided in section 92-3,
 
12 except that when it is necessary for the board to receive
 
13 information that is proprietary to a particular enterprise that
 
14 seeks entry into or use of one of its facilities or the
 
15 disclosure of which might be harmful to the business interests of
 
16 the enterprise, the board may enter into an executive meeting
 
17 that is closed to the public.
 
18      (b)  The board shall be subject to the procedural
 
19 requirements of section 92-4, and this authorization shall be an
 
20 addition to the exceptions listed in section 92-5, to enable the
 
21 development corporation to respect the proprietary requirements
 
22 of enterprises with which it has business dealings.
 
23      § -5 Powers, generally.(a)  The development corporation
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 shall have all the powers necessary to carry out its purposes,
 
 2 including the following powers:
 
 3      (1)  To sue and be sued;
 
 4      (2)  To have a seal and alter the same at its pleasure;
 
 5      (3)  To make and execute, enter into, amend, supplement, and
 
 6           carry out contracts and all other instruments necessary
 
 7           or convenient for the exercise of its powers and
 
 8           functions under this chapter including, subject to
 
 9           approval of the governor, a project agreement with a
 
10           qualified person, and any other agreement whereby the
 
11           obligations of a qualified person under a project
 
12           agreement shall be unconditionally guaranteed or
 
13           insured by, or the performance thereof assigned to, or
 
14           guaranteed or insured by, a person or persons other
 
15           than the qualified person; and to grant options or
 
16           renew any project agreement entered into by it in
 
17           connection with any project, industrial park, or
 
18           research and technology park, on terms and conditions
 
19           that it deems advisable;
 
20      (4)  To make and alter bylaws for its organization and
 
21           internal management;
 
22      (5)  To adopt rules under chapter 91 to carry out the
 
23           purposes of this chapter;
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (6)  Through its chief executive officer, to appoint
 
 2           officers, agents, and employees, prescribe their duties
 
 3           and qualifications, and fix their salaries, without
 
 4           regard to chapters 76 and 77;
 
 5      (7)  To prepare or cause to be prepared development plans
 
 6           for industrial parks or research and technology parks;
 
 7      (8)  To acquire, own, lease, hold, clear, improve, and
 
 8           rehabilitate real, personal, or mixed property and to
 
 9           assign, exchange, transfer, convey, lease, sublease, or
 
10           encumber any project including by way of easements;
 
11      (9)  To construct, reconstruct, rehabilitate, improve,
 
12           alter, or repair, or provide for the construction,
 
13           reconstruction, rehabilitation, improvement,
 
14           alteration, or repair of any project and to designate a
 
15           qualified person as its agent for that purpose, and to
 
16           own, hold, assign, transfer, convey, exchange, lease,
 
17           sublease, or encumber any project;
 
18     (10)  To arrange or initiate appropriate action for the
 
19           planning, replanning, opening, grading, or closing of
 
20           streets, roads, roadways, alleys, easements, or other
 
21           places, the furnishing of improvements, the acquisition
 
22           of property or property rights, or the furnishing of
 
23           property or services in connection with an industrial
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1           park or research and technology park;
 
 2     (11)  To prepare or cause to be prepared plans,
 
 3           specifications, designs, and estimates of cost for the
 
 4           construction, reconstruction, rehabilitation,
 
 5           improvement, alteration, or repair of any project,
 
 6           industrial park, or research and technology park, and
 
 7           from time to time to modify the plans, specifications,
 
 8           designs, or estimates;
 
 9     (12)  To engage the services of consultants on a contractual
 
10           basis for rendering professional and technical
 
11           assistance and advice;
 
12     (13)  To procure insurance against any loss in connection
 
13           with its property and other assets and operations in
 
14           such amounts and from the insurers that it deems
 
15           desirable;
 
16     (14)  To impose and collect fees pertaining to the use of its
 
17           properties and facilities;
 
18     (15)  To formulate budgets to provide for the operation of
 
19           its facilities;
 
20     (16)  To accept and expend gifts or grants in any form from
 
21           any public agency or from any other source;
 
22     (17)  To acquire, hold, and sell qualified securities;
 
23     (18)  To invest any funds held in reserves or sinking funds,
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1           or any funds not required for immediate disbursement,
 
 2           in the investments as may be lawful for fiduciaries in
 
 3           the State;
 
 4     (19)  To issue bonds pursuant to this chapter in the
 
 5           principal amounts that may be authorized from time to
 
 6           time by law to finance the cost of a project, or an
 
 7           industrial park, or research and technology park, as
 
 8           authorized by law and to provide for the security
 
 9           thereof as permitted by this chapter;
 
10     (20)  To lend or otherwise apply the proceeds of the bonds
 
11           issued for a project, or an industrial park, or
 
12           research and technology park, either directly or
 
13           through a trustee or a qualified person for use and
 
14           application in the acquisition, construction,
 
15           installation, or modification of a project, industrial
 
16           park, or research and technology park, or agree with
 
17           the qualified person whereby any of these activities
 
18           shall be undertaken or supervised by that qualified
 
19           person or by a person designated by the qualified
 
20           person;
 
21     (21)  With or without terminating a project agreement, to
 
22           exercise any and all rights provided by law for entry
 
23           and re-entry upon or to take possession of a project at
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1           any time or from time to time upon breach or default by
 
 2           a qualified person under a project agreement, including
 
 3           any action at law or in equity for the purpose of
 
 4           effecting its rights of entry or re-entry or obtaining
 
 5           possession of the project or for the payments of
 
 6           rentals, user taxes, or charges, or any other sum due
 
 7           and payable by the qualified person to the development
 
 8           corporation pursuant to the project agreement;
 
 9     (22)  To create an environment in which to support high
 
10           technology economic development, including but not
 
11           limited to:  supporting all aspects of technology-based
 
12           economic development; developing instructive programs,
 
13           identifying issues and impediments to the growth of
 
14           high technology industry in Hawaii; and providing
 
15           policy analysis and information important to the
 
16           development of high technology industries in Hawaii;
 
17     (23)  To develop programs that support start-up and existing
 
18           high technology companies in Hawaii and to attract new
 
19           companies to relocate to or establish operations in
 
20           Hawaii by assessing the needs of these companies and
 
21           providing the physical and technical infrastructure to
 
22           support their operations;
 
23     (24)  To promote and market Hawaii as a site for commercial
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1           high technology activity;
 
 2     (25)  To provide advice on policy and planning for
 
 3           technology-based economic development;
 
 4     (26)  To coordinate its efforts with other public and private
 
 5           agencies involved in stimulating technology-based
 
 6           economic development in Hawaii;
 
 7     (27)  To enter into arrangements with qualified county
 
 8           development entities whereby the board would provide
 
 9           financial support to qualified projects proposed;
 
10     (28)  To enter into agreements or other transactions with any
 
11           federal, state, or county agency;
 
12     (29)  To appear in its own behalf before state, county, or
 
13           federal agencies; and
 
14     (30)  To do all things necessary or proper to carry out the
 
15           purposes of this chapter.
 
16      (b)  The corporation shall not promise to answer for the
 
17 debts of any other person.
 
18      § -6 Compliance with state and local law.  The issuance
 
19 of bonds with respect to any project, industrial park, or
 
20 research and technology park under this chapter shall not relieve
 
21 any qualified person or other user of the project, industrial
 
22 park, or research and technology park from the laws, ordinances,
 
23 and rules of the State or any political subdivision thereof, or
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 any department or board thereof with respect to the construction,
 
 2 operation, and maintenance of any project, industrial park, or
 
 3 research and technology park, or zoning laws or regulations,
 
 4 obtaining of building permits, compliance with building and
 
 5 health codes and other laws, ordinances, or rules and regulations
 
 6 of similar nature pertaining to the project, industrial park, or
 
 7 research and technology park, and the laws shall be applicable to
 
 8 the qualified person or any other user to the same extent they
 
 9 would be if the costs of the project, industrial park, or
 
10 research and technology park were directly financed by the
 
11 qualified person.
 
12      §   -7 Development rules.  Whenever the proceeds of bonds
 
13 are used to finance the cost of a project, the board shall adopt
 
14 rules under chapter 91 to be followed during the course of the
 
15 development of any industrial park or research and technology
 
16 park, which are to be known as development rules in connection
 
17 with health, safety, building, planning, zoning, and land use.
 
18 The rules, upon final adoption of a development plan for an
 
19 industrial park or research and technology park, shall supersede
 
20 all other inconsistent ordinances and rules relating to the use,
 
21 zoning, planning, and development of land and construction
 
22 thereon within the industrial park or research and technology
 
23 park.  Rules adopted under this section shall follow existing
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 law, rules, ordinances, and regulations as closely as is
 
 2 consistent with standards meeting minimum requirements of good
 
 3 design, pleasant amenities, health, safety, and coordinated
 
 4 development.  The corporation shall establish policies and
 
 5 procedures for monitoring and ensuring that the operation of the
 
 6 industrial park or research and technology park complies with
 
 7 these development rules and may establish fines and penalties or
 
 8 take any other means available under the law to eliminate any
 
 9 noncomplying action.
 
10      §   -8 Use of public lands.  The governor may set aside
 
11 available public lands to the development corporation for the
 
12 purposes specified in this chapter; provided that the setting
 
13 aside would not impair any covenant between the State or any
 
14 department or board thereof and holders of revenue bonds issued
 
15 by the State or the department or board thereof.  The development
 
16 corporation also may lease available state lands from the
 
17 department of land and natural resources.
 
18      § -9 Conditions precedent to negotiating and entering
 
19 into a project agreement.(a)  The development corporation prior
 
20 to entering into negotiations with respect to a project agreement
 
21 or at any time during the negotiations shall require that as a
 
22 condition to the negotiations or the continuation thereof the
 
23 State shall be reimbursed for any and all costs and expenses
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 incurred by it even though a project agreement may not be entered
 
 2 into and may further require the deposit of moneys with the
 
 3 development corporation as security for the reimbursement.  Any
 
 4 amount of the deposit in excess of the amount required to
 
 5 reimburse the State shall be returned by the development
 
 6 corporation to the party which has made the deposit. 
 
 7      (b)  The development corporation shall not enter into any
 
 8 project agreement with respect to any project, industrial park,
 
 9 or research and technology park, unless the legislature has
 
10 authorized the issuance of bonds to finance the project,
 
11 industrial park, or research and technology park, pursuant to
 
12 section    -11 and development corporation has thereafter found
 
13 and determined either that: 
 
14      (1)  The qualified person is a responsible party, whether by
 
15           reason of economic assets or experience in the type of
 
16           enterprise to be undertaken through the project, or
 
17           otherwise; or 
 
18      (2)  The obligations of the qualified person under the
 
19           project agreement will be unconditionally guaranteed by
 
20           a person who is a responsible party, whether by reason
 
21           of economic assets or experience in the type of
 
22           enterprise to be undertaken through the project or
 
23           otherwise.
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1      § -10  Project agreement.(a)  No bonds shall be issued
 
 2 unless at the time of issuance the development corporation has
 
 3 entered into a project agreement with respect to the project,
 
 4 industrial park, or research and technology park for the
 
 5 financing of which bonds are to be issued.  Any project agreement
 
 6 entered into by the development corporation with a qualified
 
 7 person shall contain provisions unconditionally obligating the
 
 8 qualified person to pay the development corporation during the
 
 9 period or term of the project agreement, exclusive of any renewal
 
10 or extension thereof and whether or not the project, industrial
 
11 park, or research and technology park to which the project
 
12 agreement relates is used or occupied by the qualified person, at
 
13 such time or times and in the amount or amounts that will be at
 
14 least sufficient: 
 
15      (1)  To pay the principal of, and premium, if any, and
 
16           interest on all bonds issued to finance the cost of the
 
17           project, or an allocable portion of the bonds issued to
 
18           finance the industrial park or research and technology
 
19           park, as the case may be, as and when the bonds become
 
20           due, including upon any required redemption thereof; 
 
21      (2)  To establish or maintain the reserves, if any, as may
 
22           be required by the instrument authorizing or securing
 
23           the bonds, or an allocable portion of the reserves, if
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1           less than all of the proceeds of the bonds are utilized
 
 2           for the qualified person; 
 
 3      (3)  To pay the fees and expenses of the paying agents and
 
 4           trustees for the bonds, or an allocable portion of the
 
 5           fees and expenses, if less than all of the proceeds of
 
 6           the bonds are utilized for the qualified person; and 
 
 7      (4)  To pay the expenses incurred by the development
 
 8           corporation in administering the bonds or in carrying
 
 9           out the project agreement, or an allocable portion of
 
10           the expenses, if less than all of the proceeds of the
 
11           bonds are utilized for the qualified person. 
 
12      (b)  Any project agreement entered into by the development
 
13 corporation may contain provisions that the development
 
14 corporation deems necessary or desirable to obtain or permit the
 
15 participation of the state and federal government in the project,
 
16 industrial park, or research and technology park, or in the
 
17 financing of the cost thereof.
 
18      (c)  A project agreement also shall provide that the
 
19 development corporation shall have all rights and remedies
 
20 generally available at law or in equity to re-enter and take
 
21 possession of a project upon the breach or default by a qualified
 
22 person of any term, condition, or provision of a project
 
23 agreement. 
 

 
Page 24                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      Moneys received by the development corporation pursuant to
 
 2 subsection (a)(4) shall not be, nor be deemed to be, revenues or
 
 3 receipts derived under the project agreement that may be pledged
 
 4 as security for bonds and shall be paid to the development
 
 5 corporation free and clear of any lien. 
 
 6      A qualified person may comply with the unconditional
 
 7 obligation to make payments required by subsection (a), if the
 
 8 obligations are unconditionally guaranteed or insured by, or the
 
 9 performance thereof assigned to, or guaranteed or insured by, a
 
10 person or persons other than the qualified person which is
 
11 satisfactory to the development corporation.
 
12      § -11  Bonds; bond anticipation notes.(a)  The
 
13 development corporation, with the approval of the governor, may
 
14 issue revenue bonds for each single project, industrial park,
 
15 research and technology park, or multi-project program that has
 
16 been authorized by the legislature; provided that the legislature
 
17 shall find that the issuance of the bonds is in the public
 
18 interest.  Bonds shall be issued in the principal amounts that
 
19 may be authorized from time to time by law and at the time or
 
20 times that the development corporation deems necessary and
 
21 advisable to finance the cost of a project, industrial park, or
 
22 research and technology park as authorized by law.  The principal
 
23 of, premium, if any, and interest on the bonds shall be payable: 
 

 
Page 25                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (1)  Exclusively from the revenues and receipts derived or
 
 2           to be derived by the development corporation under
 
 3           project agreements or from the revenues and receipts
 
 4           together with any grant from the government in aid of
 
 5           the project, industrial park, or research and
 
 6           technology park financed from the proceeds of the
 
 7           bonds; 
 
 8      (2)  Exclusively from the revenues and receipts derived or
 
 9           to be derived by the development corporation from a
 
10           particular project agreement, whether or not the
 
11           project, industrial park, or research and technology
 
12           park to which it relates is financed in whole or in
 
13           part with the proceeds of the bonds; or 
 
14      (3)  From revenues and receipts derived or to be derived by
 
15           the development corporation generally. 
 
16      Neither the board members nor any person executing the bonds
 
17 shall be liable personally on the bonds by reason of the issuance
 
18 thereof. 
 
19      (b)  Bonds issued pursuant to this chapter may be in one or
 
20 more issues and in one or more series within an issue and shall
 
21 be further authorized pursuant to resolution of the board.  The
 
22 bonds shall be dated, shall bear interest at the rate or rates,
 
23 shall mature at the time or times not exceeding forty years from
 

 
Page 26                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 their date or dates, shall have the rank or priority, and may be
 
 2 made redeemable before maturity at the option of the development
 
 3 corporation, at the price or prices and under the terms and
 
 4 conditions, all as may be determined by the development
 
 5 corporation. 
 
 6      The development corporation shall determine the form of the
 
 7 bonds, including interest coupons to be attached thereto, and the
 
 8 manner of execution of the bonds, and shall fix the denomination
 
 9 or denominations of the bonds and, subject to the approval of the
 
10 state director of finance the place or places of payment of
 
11 principal and interest, which may be at any bank or trust company
 
12 approved by the state director of finance within or without the
 
13 State. 
 
14      The bonds may be issued in coupon or in registered form, or
 
15 both, as the development corporation may determine, and
 
16 provisions may be made for the registration of coupon bonds as to
 
17 principal alone and also as to both principal and interest, and
 
18 for the reconversion into coupon bonds of bonds registered as to
 
19 both principal and interest.  Subject to the approval of the
 
20 state director of finance, the development corporation may sell
 
21 bonds in the manner, either at public or private sale, and for
 
22 the price that it determines. 
 
23      (c)  Prior to the preparation of definitive bonds, the
 

 
Page 27                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 development corporation may issue interim receipts or temporary
 
 2 bonds, with or without coupons, exchangeable for definitive bonds
 
 3 when the bonds have been executed and are available for delivery. 
 
 4      (d)  Should any bond issued under this chapter or any coupon
 
 5 appertaining thereto become mutilated, lost, stolen, or
 
 6 destroyed, the development corporation may cause a new bond or
 
 7 coupon of like date, number, and tenor to be executed and
 
 8 delivered in exchange and substitution for, and upon the
 
 9 cancellation of the mutilated bond or coupon, or in lieu of and
 
10 in substitution for the lost, stolen, or destroyed bond or
 
11 coupon.  The new bond or coupon shall not be executed or
 
12 delivered until the holder of the mutilated, lost, stolen, or
 
13 destroyed bond or coupon:
 
14      (1)  Has paid the reasonable expenses and charges in
 
15           connection therewith; 
 
16      (2)  In the case of a lost, stolen, or destroyed bond or
 
17           coupon, has filed with the development corporation or
 
18           its fiduciary evidence satisfactory to the development
 
19           corporation or its fiduciary that the bond or coupon
 
20           was lost, stolen, or destroyed and that the holder was
 
21           the owner thereof; and 
 
22      (3)  Has furnished indemnity satisfactory to the development
 
23           corporation. 
 

 
Page 28                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (e)  The development corporation in its discretion may
 
 2 provide that CUSIP identification numbers shall be printed on the
 
 3 bonds.  If the numbers are imprinted on the bonds (1) no number
 
 4 shall constitute a part of the contract evidenced by the
 
 5 particular bond upon which it is imprinted, and (2) no liability
 
 6 shall attach to the development corporation or any officer or
 
 7 agent thereof, including any fiscal agent, paying agent, or
 
 8 registrar for the bonds by reason of the numbers or any use made
 
 9 thereof, including any use thereof made by the development
 
10 corporation, any officer, or any agent, or by reason of any
 
11 inaccuracy, error, or omission with respect thereto or in the
 
12 use.  The development corporation in its discretion may require
 
13 that all costs of obtaining and imprinting the numbers shall be
 
14 paid by the purchaser of the bonds.  For the purposes of this
 
15 subsection, the term "CUSIP identification numbers" means the
 
16 numbering system adopted by the Committee for Uniform Security
 
17 Identification Procedures formed by the Securities Industry
 
18 Association. 
 
19      (f)  Whenever the development corporation has authorized the
 
20 issuance of bonds under this chapter, bond anticipation notes of
 
21 the development corporation may be issued in anticipation of the
 
22 issuance of the bonds and of the receipt of the proceeds of sale
 
23 thereof, for the purposes for which the bonds have been
 

 
Page 29                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 authorized.  All bond anticipation notes shall be authorized by
 
 2 the development corporation, and the maximum principal amount of
 
 3 the notes shall not exceed the authorized principal amount of the
 
 4 bonds.  The notes shall be payable solely from and secured solely
 
 5 by the proceeds of sale of the bonds in anticipation of which the
 
 6 notes are issued and the moneys, rates, charges, and other
 
 7 revenues from which would be payable and by which would be
 
 8 secured the bonds; provided that to the extent that the principal
 
 9 of the notes shall be paid from moneys other than the proceeds of
 
10 sale of the bonds, the maximum amount of bonds that has been
 
11 authorized in anticipation of which the notes are issued shall be
 
12 reduced by the amount of notes paid in such manner.  The
 
13 authorization, issuance, and the details of the notes shall be
 
14 governed by this chapter with respect to bonds insofar as the
 
15 same may be applicable; provided that each note, together with
 
16 all renewals and extensions thereof, or refundings thereof by
 
17 other notes issued under this subsection, shall mature within
 
18 five years from the date of the original note. 
 
19      (g)  In order to secure the payment of any of the bonds
 
20 issued pursuant to this chapter, and interest thereon, or in
 
21 connection with the bonds, the development corporation may: 
 
22      (1)  Pledge all or any part of the revenues and receipts
 
23           derived or to be derived by the development corporation
 

 
Page 30                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1           as provided in this chapter to the punctual payment of
 
 2           bonds and interest thereon, and covenant against
 
 3           thereafter pledging the revenues and receipts to other
 
 4           bonds or other obligations of the development
 
 5           corporation for any other purpose, except as otherwise
 
 6           stated in the proceedings providing for the issuance of
 
 7           bonds permitting the issuance of additional bonds to be
 
 8           equally and ratably secured by a lien upon the moneys,
 
 9           rates, charges, and other revenues; 
 
10      (2)  Pledge and assign the interest of the development
 
11           corporation under any project agreement and other
 
12           agreements related to a project, industrial park, or
 
13           research and technology park, and the rights, duties,
 
14           and obligations of the development corporation
 
15           thereunder, including the right to receive revenues and
 
16           receipts thereunder;
 
17      (3)  Pledge or assign all or any part of the proceeds
 
18           derived by the development corporation from proceeds of
 
19           insurance or condemnation awards; 
 
20      (4)  Covenant as to the use and disposition of the proceeds
 
21           from the sale of the bonds; 
 
22      (5)  Covenant to set aside or pay over reserves and sinking
 
23           funds for the bonds and as to the disposition thereof; 
 

 
Page 31                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (6)  Covenant and prescribe as to what happenings or
 
 2           occurrences shall constitute "events of default", the
 
 3           terms and conditions upon which any or all of the bonds
 
 4           shall become or may be declared due before maturity,
 
 5           and as to the terms and conditions upon which the
 
 6           declaration and its consequences may be waived; 
 
 7      (7)  Covenant as to the rights, liabilities, powers, and
 
 8           duties arising upon the breach by it of any covenant,
 
 9           condition, or obligation; 
 
10      (8)  Subject to the approval of the state director of
 
11           finance, designate a national or state bank or trust
 
12           company within or without the State incorporated in the
 
13           United States, to serve as trustee for the holders of
 
14           the bonds and to enter into a trust indenture, trust
 
15           agreement, or indenture of mortgage with the trustee;
 
16           The trustee may be authorized by the development
 
17           corporation to receive and receipt for, hold, and
 
18           administer the proceeds of the bonds and to apply the
 
19           proceeds to the purposes for which the bonds are
 
20           issued, or to receive and receipt for, hold, and
 
21           administer the revenues and receipts derived or to be
 
22           derived by the development corporation under a project
 
23           agreement or other agreement related to a project,
 

 
Page 32                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1           industrial park, or research and technology park, and
 
 2           to apply the revenues and receipts to the payment of
 
 3           the principal of and interest on the bonds, or both,
 
 4           and excess revenues and receipts to the payment of
 
 5           expenses incurred by the development corporation in
 
 6           administering the bonds or in carrying out the project
 
 7           agreement or other agreement.  If the trustee is
 
 8           appointed, any trust indenture, trust agreement, or
 
 9           indenture of mortgage entered into by the development
 
10           corporation with the trustee may contain whatever
 
11           covenants and provisions that may be necessary,
 
12           convenient, or desirable in order to secure the bonds.
 
13           The development corporation may pledge and assign to
 
14           the trustee a project agreement and other agreements
 
15           related thereto and the rights of the development
 
16           corporation thereunder, including the right to receive
 
17           revenues and receipts thereunder.  The development
 
18           corporation may appoint the trustee to serve as fiscal
 
19           agent for the payment of the principal and interest,
 
20           and for the purchase, registration, transfer, exchange,
 
21           and redemption of the bonds, and may authorize and
 
22           empower the trustee to perform the functions with
 
23           respect to the payment, purchase, registration,
 

 
Page 33                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1           transfer, exchange, and redemption, that the
 
 2           development corporation may deem necessary, advisable,
 
 3           or expedient, including without limitation the holding
 
 4           of the bonds and coupons that have been paid and the
 
 5           supervision of the destruction thereof in accordance
 
 6           with law; 
 
 7      (9)  Execute all instruments necessary or convenient in the
 
 8           exercise of the powers herein granted or in the
 
 9           performance of its covenants and duties; 
 
10     (10)  Invest or provide for the investment of the proceeds of
 
11           bonds and revenues and receipts derived by the
 
12           development corporation in the securities and in the
 
13           manner that it deems proper; and 
 
14     (11)  Make the covenants and do any and all acts and things
 
15           that may be necessary, convenient, or desirable in
 
16           order to secure the bonds, notwithstanding that the
 
17           covenants, acts, or things may not be enumerated in
 
18           this chapter. 
 
19      (h)  Bonds bearing the signature or facsimile signature of
 
20 officers in office on the date of the signing thereof shall be
 
21 valid and sufficient for all purposes, notwithstanding that
 
22 before the delivery thereof and payment therefor any or all the
 
23 persons whose signatures appear thereon shall have ceased to be
 

 
Page 34                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 officers of the development corporation.  The bonds shall contain
 
 2 a recital that they are issued pursuant to this chapter which
 
 3 recital shall be conclusive evidence of their validity and of the
 
 4 regularity of their issuance. 
 
 5      (i)  Subject to authorization by an act enacted by the
 
 6 legislature, the development corporation may issue bonds for the
 
 7 purpose of refunding bonds then outstanding and issued under this
 
 8 chapter whether or not the outstanding bonds have matured or are
 
 9 then subject to redemption.  The development corporation may
 
10 issue bonds for the combined purposes of (1) financing or
 
11 refinancing the cost of a project, industrial park, or research
 
12 and technology park, or the improvement or expansion thereof, and
 
13 (2) refunding bonds which have been issued under this chapter and
 
14 then are outstanding, whether or not the outstanding bonds have
 
15 matured or then are subject to redemption. 
 
16      Nothing in this subsection shall require or be deemed to
 
17 require the development corporation to elect to redeem or prepay
 
18 bonds being refunded, or to redeem or prepay bonds being refunded
 
19 which were issued, in the form customarily known as term bonds in
 
20 accordance with any sinking fund installment schedule specified
 
21 in any proceeding authorizing the issuance thereof, or, if the
 
22 development corporation elects to redeem or prepay the bonds, to
 
23 redeem or prepay as of any particular date or dates.  The
 

 
Page 35                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 issuance of the bonds, the maturities and other details thereof,
 
 2 the rights and remedies of the holders thereof, and the rights,
 
 3 powers, privileges, duties, and obligations of the development
 
 4 corporation with respect to the bonds, shall be governed by the
 
 5 foregoing provisions of this chapter insofar as the same may be
 
 6 applicable.
 
 7      § -12  Bonds not a general or moral obligation of State.
 
 8 No holder or holders of bonds issued under this chapter shall
 
 9 ever have the right to compel any exercise of the taxing power of
 
10 the State to pay the bonds or the interest thereon and no moneys
 
11 other than the revenues pledged to the bonds shall be applied to
 
12 the payment thereof.  Each bond issued under this chapter shall
 
13 recite in substance that the bond, including interest thereon, is
 
14 not a general or moral obligation of the State and is payable
 
15 solely from the revenues pledged to the payment thereof, and that
 
16 the bond is not secured, directly or indirectly, by the full
 
17 faith and credit or the general credit of the State or by
 
18 revenues or taxes of the State other than the revenues
 
19 specifically pledged thereto.
 
20      § -13  Bonds exempt from taxation.  Bonds and the income
 
21 therefrom issued pursuant to this chapter shall be exempt from
 
22 all state taxation, except inheritance, transfer, and estate
 
23 taxes.
 

 
Page 36                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      § -14  Bonds as legal investments and lawful security.
 
 2 Bonds issued pursuant to this chapter shall be and are declared
 
 3 to be legal and authorized investments for banks, savings banks,
 
 4 trust companies, savings and loan associations, insurance
 
 5 companies, fiduciaries, trustees, guardians, and for all public
 
 6 funds of the State or other political corporations or
 
 7 subdivisions of the State.  The bonds shall be eligible to secure
 
 8 the deposit of any and all public funds of the State or political
 
 9 corporations or subdivisions of the State, and the bonds shall be
 
10 lawful and sufficient security for the deposits to the extent of
 
11 their value when accompanied by unmatured coupons appertaining
 
12 thereto.
 
13      § -15  Status of bonds under Uniform Commercial Code.
 
14 Notwithstanding any of the provisions of this chapter or any
 
15 recital in any bond issued under this chapter, all the bonds
 
16 shall be deemed to be investment securities under the Uniform
 
17 Commercial Code, chapter 490, subject only to the provisions of
 
18 the bonds pertaining to registration.
 
19      § -16  Revenue bond fund accounts.  The development
 
20 corporation shall establish separate special funds in accordance
 
21 with section 39-62 for the deposit of the proceeds of bonds
 
22 authorized under this chapter.
 
23      § -17  High technology special fund.  There is established
 

 
Page 37                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 in the state treasury a fund to be known as the high technology
 
 2 special fund, into which shall be deposited all moneys and fees
 
 3 from tenants or other users of the development corporation's
 
 4 industrial parks or research and technology parks, projects,
 
 5 other leased facilities, and other services and publications.
 
 6 All moneys in the fund shall be expended by the development
 
 7 corporation for the operation, maintenance, and management of its
 
 8 industrial parks, research and technology parks, projects,
 
 9 facilities, services, and publications.
 
10      § -18  Authorization for loans; loan terms and conditions;
 
11 loan procedure.(a)  Notwithstanding any law to the contrary,
 
12 the state director of finance with the approval of the governor,
 
13 may make loans up to the aggregate sum of $1,000,000, or so much
 
14 thereof as may be necessary, to the development corporation.  The
 
15 loans shall be made from the state general fund moneys that are
 
16 in excess of the amounts necessary for immediate state
 
17 requirements, and shall be used for paying administrative and
 
18 other costs associated with the development of industrial parks
 
19 or research and technology parks, and other projects and
 
20 activities that encourage the growth of the high technology
 
21 industry in Hawaii.
 
22      (b)  The development corporation, to the extent moneys
 
23 become available from bond proceeds or otherwise, shall repay the
 

 
Page 38                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 general fund the principal amount of any loan made by the state
 
 2 director of finance.  No interest shall be required for any such
 
 3 loan. 
 
 4      (c)  Loans authorized by this section shall be drawn upon by
 
 5 the development corporation from time to time upon at least five
 
 6 days notice to the state director of finance and upon the filing
 
 7 with the state director of finance of a certificate of the
 
 8 chairperson of the board setting forth the amount being borrowed,
 
 9 the names of the persons, firms, or corporations to which moneys
 
10 will be paid from the proceeds of the borrowing and the amount to
 
11 be paid to each.  In addition, the chairperson of the board shall
 
12 file with the state director of finance a copy of the resolution
 
13 or resolutions of the board approving contracts for services
 
14 which will be paid from the proceeds of the borrowing.
 
15      § -19  High technology research and development loans and
 
16 grants.(a)  All moneys necessary to carry out this section
 
17 shall be allocated by the legislature through appropriations out
 
18 of the state general fund.  The development corporation shall
 
19 include in its budgetary request for the upcoming fiscal period,
 
20 the amounts necessary to effectuate this section.  All moneys,
 
21 interest charges, and other fees collected by the development
 
22 corporation under this section shall be deposited to the credit
 
23 of the state general fund.  In making any expenditure under this
 

 
Page 39                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 section, the development corporation shall analyze each funding
 
 2 request to determine whether the project to be undertaken will be
 
 3 economically viable and beneficial to the State.
 
 4      (b)  The development corporation may provide grants of up to
 
 5 fifty per cent of a federal award or contract up to $25,000 to
 
 6 each business in Hawaii that receives a federal small business
 
 7 innovation research phase I award or contract from any
 
 8 participating federal agency subject to the availability of
 
 9 funds.
 
10      (c)  The development corporation shall adopt rules pursuant
 
11 to chapter 91 that:
 
12      (1)  Specify the qualifications for eligibility of grant
 
13           applicants;
 
14      (2)  Establish priorities in determining eligibility if
 
15           insufficient funds are available to fund otherwise
 
16           qualified applicants; and
 
17      (3)  Give preference to all qualified businesses receiving
 
18           their first award in one fiscal year over multiple
 
19           award grantees.
 
20 The development corporation may adopt any other rules pursuant to
 
21 chapter 91 necessary for the purposes of this section.
 
22      (d)  If funds appropriated for the purpose of making grants
 
23 under this section are inadequate to satisfy all qualified
 

 
Page 40                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 requests, the development corporation shall apply for funds to be
 
 2 transferred from the Hawaii capital loan revolving fund to
 
 3 provide the grants in accordance with subsection (b).  The amount
 
 4 of any single transfer of funds shall not exceed $100,000, and
 
 5 the development corporation shall transfer the entire amount back
 
 6 to the Hawaii capital loan revolving fund within twelve months of
 
 7 receiving the funds.  No more than one fund transfer shall be
 
 8 outstanding at any one time.  The director of business, economic
 
 9 development, and tourism may transfer funds from the Hawaii
 
10 capital loan revolving fund to the high technology research and
 
11 development corporation upon request to carry out this section.
 
12 Transfers of funds shall be made without any charges or fees.
 
13      § -20  Exemption of development corporation from taxation
 
14 and certain state laws.(a)  All revenues and receipts derived
 
15 by the development corporation from any project, industrial park,
 
16 or research and technology park, or under a project agreement or
 
17 other agreement pertaining thereto shall be exempt from all state
 
18 taxation.  Any right, title, and interest of the development
 
19 corporation in any project, industrial park, or research and
 
20 technology park shall also be exempt from all state taxation.
 
21 Except as otherwise provided by law, the interest of a qualified
 
22 person or other user of a project, industrial park, or research
 
23 and technology park under a project agreement or other agreements
 

 
Page 41                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 related to a project, industrial park, or research and technology
 
 2 park shall not be exempt from taxation to a greater extent than
 
 3 it would be if the costs of the project, industrial park, or
 
 4 research and technology park were directly financed by the
 
 5 qualified person or user.
 
 6      (b)  In order to promote the development of the high
 
 7 technology industry and to facilitate the development of its
 
 8 technology centers, research and technology parks, and incubation
 
 9 programs, the development corporation shall be granted
 
10 flexibility in handling and disbursing moneys by being excepted
 
11 from the following state laws:
 
12      (1)  Sections 36-27 and 36-30, relating to special fund
 
13           reimbursements to the state general fund; and
 
14      (2)  Chapter 103D and section 103-42, relating to
 
15           advertising for bids and purchases to be made in
 
16           Hawaii.
 
17      § -21  Patents, copyrights, and other rights.  Any
 
18 patents, copyrights, inventions, discoveries, or other rights
 
19 arising from development corporation activities shall belong to
 
20 the development corporation and be subject to the policies or
 
21 rules that the board of directors adopts.
 
22      § -22  Assistance by state and county agencies.  Every
 
23 state or county agency may render services to the development
 

 
Page 42                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 corporation upon request of the development corporation.
 
 2      § -23  Court proceedings; preferences.  Any action or
 
 3 proceeding to which the development corporation, the State, or a
 
 4 county may be party, in which any question arises as to the
 
 5 validity of this chapter, shall be preferred over all other civil
 
 6 causes, except election cases, without respect to position on the
 
 7 calendar.  The same preference shall be given upon application of
 
 8 counsel for the development corporation in any action or
 
 9 proceeding questioning the validity of this chapter in which the
 
10 development corporation has duly intervened.
 
11      § -24  Annual reports.  The development corporation shall
 
12 submit a complete and detailed report of the corporation's
 
13 activities to the legislature twenty days prior to the convening
 
14 of each regular session.
 
15      § -25  Annual audit.  The books and records of the
 
16 corporation shall be subject to an annual audit by an independent
 
17 auditor.
 
18      § -26  Construction of this chapter.  The powers conferred
 
19 by this chapter shall be in addition and supplemental to other
 
20 powers conferred by any other law.  This chapter shall constitute
 
21 and be enabling legislation for the development corporation, as
 
22 an agency and instrumentality of the State, to issue revenue
 
23 bonds in accordance with the provisions of this chapter and
 

 
Page 43                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 chapter 39.  Insofar as the provisions of this chapter are
 
 2 inconsistent with the provisions of any other law, this chapter
 
 3 shall be controlling.
 
 4             PART II.  HAWAII SOFTWARE SERVICE CENTER
 
 5      § -31  Hawaii software service center; establishment.
 
 6 There is established the Hawaii software service center,
 
 7 hereinafter referred to in this part as center, within the
 
 8 development corporation.  The center shall provide support to
 
 9 foster and sustain Hawaii's software industry.
 
10      § -32  Duties.  The center shall:
 
11      (1)  Provide access to market research services, including
 
12           on-line and printed publications;
 
13      (2)  Develop, publish, and maintain a directory of federal,
 
14           state, and county software development and service
 
15           opportunities;
 
16      (3)  Develop, publish, and maintain a directory of software
 
17           providers in the State according to their facilities
 
18           and capabilities;
 
19      (4)  Develop, publish, and maintain a directory of mainland
 
20           companies that use software subcontractors, including
 
21           but not be limited to, government prime contractors and
 
22           private sector providers;
 
23      (5)  Publish and maintain a catalog of packaged software
 

 
Page 44                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1           products produced in the State;
 
 2      (6)  Develop, publish, and maintain a list of qualified
 
 3           mainland software product packaging providers;
 
 4      (7)  Identify and maintain a listing of current domestic and
 
 5           international sales channels and distributors;
 
 6      (8)  Develop, publish, and maintain a directory of packaged
 
 7           software applications available for import, including
 
 8           but not limited to, distribution licenses, service
 
 9           support, and retail sales;
 
10      (9)  Develop, publish, and maintain a list of government
 
11           software development contracts available to Hawaii
 
12           software development businesses;
 
13     (10)  Act as the coordinator between the public, private, and
 
14           nonprofit sectors in the State to analyze, articulate,
 
15           and implement actions, solutions, and programs that are
 
16           necessary to support the continued growth of the
 
17           software industry;
 
18     (11)  Develop a marketing plan to promote the software
 
19           industry in domestic and international marketplaces;
 
20     (12)  Closely monitor the software industry to identify
 
21           infrastructure and industry deficiencies;
 
22     (13)  In conjunction with appropriate state agencies, develop
 
23           the plans and procedures to evaluate, copyright,
 

 
Page 45                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1           license, trademark, and market software programs funded
 
 2           by and developed for use by the State;
 
 3     (14)  Organize and implement strategic alliances,
 
 4           partnerships, and consortiums between the private
 
 5           sector, academia, and state agencies to enable the
 
 6           software industry to compete with established domestic
 
 7           and international software providers;
 
 8     (15)  Produce a plan for establishing a center for excellence
 
 9           in software development in Hawaii; and
 
10     (16)  Do all things necessary and proper to carry out the
 
11           purposes of this part.
 
12      § -33  Copyrights and licenses.(a)  The development
 
13 corporation may copyright software applications and programs
 
14 developed for state use with public funds and license their
 
15 subsequent sale and distribution; provided that this authority
 
16 shall be subject to the terms and conditions of a contract to
 
17 license between the development corporation and the affected
 
18 state departments or agencies that developed the software
 
19 applications or programs.  Any copyright arising from center
 
20 activities shall belong to the State and any revenues generated
 
21 by licenses and subsequent sale and distribution of copyrighted
 
22 software shall be deposited into the general fund unless
 
23 otherwise stipulated in a licensing agreement.
 

 
Page 46                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (b)  The development corporation may contract to license
 
 2 with state departments or agencies and the University of Hawaii
 
 3 to license software to Hawaii-based software development
 
 4 companies on behalf of the State for the purpose of software
 
 5 enhancement, resale, and providing value-added services.  The
 
 6 development corporation shall ensure through a license that the
 
 7 licensee shall use the software asset solely for the purposes
 
 8 enumerated in the licensing agreement.
 
 9      (c)  Nothing in this section shall change the existing
 
10 authority of state agencies to license or copyright software
 
11 products.
 
12                             PART III.
 
13               HAWAII STRATEGIC DEVELOPMENT PROGRAM
 
14                  SUBPART A. GENERAL PROVISIONS
 
15      § -41  Hawaii strategic development program;
 
16 establishment; purpose.  (a)  There is established the Hawaii
 
17 strategic development program, hereinafter referred to in this
 
18 part as program, within the development corporation.
 
19      (b)  The purpose of this program shall be to encourage
 
20 economic development and diversification in Hawaii through
 
21 innovative actions that stimulate private capital investment in
 
22 Hawaii toward investments that promote economic growth,
 
23 employment, and economic diversification.  The development
 

 
Page 47                                                    
                                     S.B. NO.           2708
                                                        
                                                        

 
 1 corporation may use public funds to provide incentives to private
 
 2 investment activity by co-investing public funds in private
 
 3 financial organizations to increase the impact of the public
 
 4 investment, and by using public funds to reduce the risks of
 
 5 private investments.  The development corporation shall have the
 
 6 flexibility to provide various types of financial assistance.
 
 7 When providing financial assistance, the development corporation
 
 8 shall make provision for the recovery of its expenditures, as far
 
 9 as possible.
 
10      § -42  Duties.(a)  The development corporation shall:
 
11      (1)  Finance, conduct, or cooperate in financing or
 
12           conducting technological, business, financial, or other
 
13           investigations that are related to or likely to lead to
 
14           business and economic development by making and
 
15           entering into contracts and other appropriate
 
16           arrangements, including the provision of loans, start-
 
17           up and expansion capital, and other forms of
 
18           assistance;
 
19      (2)  Solicit, study, and assist in the preparation of
 
20           business plans and proposals of new or established
 
21           businesses;
 
22      (3)  Provide advice and technical and marketing assistance,
 
23           support, and promotion to enterprises in which
 

 
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 1           investments have been made;
 
 2      (4)  Coordinate the program's activities with any education
 
 3           and training program;
 
 4      (5)  Carry out specialized activities designed to encourage
 
 5           the development of new products, businesses, and
 
 6           markets;
 
 7      (6)  Prepare, publish, and distribute the technical studies,
 
 8           reports, bulletins, and other materials that it deems
 
 9           appropriate, subject only to the maintenance and
 
10           respect for confidentiality of client proprietary
 
11           information; and
 
12      (7)  Organize, conduct, sponsor, or cooperate in and assist
 
13           in the conduct of conferences, demonstrations, and
 
14           studies relating to the stimulation and formation of
 
15           businesses.
 
16      § -43  Hawaii strategic development program revolving
 
17 fund.  There is established the Hawaii strategic development
 
18 program revolving fund, which shall consist of all moneys
 
19 appropriated by the legislature, received under this part as
 
20 repayments of loans, earned on investments, received pursuant to
 
21 a venture agreement, received as royalties, received as premiums
 
22 or fees charged by the development corporation, or otherwise
 
23 received by the corporation for the program.
 

 
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 1      § -44  Actions of corporation; guidelines.(a)  The
 
 2 development corporation shall evaluate all program activities
 
 3 after three years to determine their effectiveness.  The
 
 4 development corporation shall establish rules to assure equal
 
 5 opportunity to minority-owned businesses, and shall encourage the
 
 6 development of minority-owned businesses.  The development
 
 7 corporation shall support and encourage participation by Hawaii
 
 8 companies in federal grant programs, such as the Small Business
 
 9 Innovation Research Program.
 
10      (b)  Financial participation shall be made on the condition
 
11 that the recipient of the assistance shall utilize the money to
 
12 assist economic development projects within the State that have
 
13 potential for creating new jobs or retaining current jobs within
 
14 the State.
 
15      (c)  Financial participation by the development corporation
 
16 in private financial investment funds shall be made with the
 
17 provision that the private fund shall make investments in Hawaii
 
18 in amounts at least equal to the amount of state participation.
 
19      (d)  The development corporation shall not make direct
 
20 investments in individual businesses except upon a two-thirds
 
21 vote of the board in each case considered.  When deciding whether
 
22 to enter into a direct investment, the development corporation
 
23 shall consider whether:
 

 
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 1      (1)  The project is economically sound;
 
 2      (2)  The project can be successfully completed;
 
 3      (3)  The project will promote economic diversification;
 
 4      (4)  The project is located in or will locate in the State
 
 5           and has a reasonable potential to create desirable
 
 6           employment opportunities for residents of the State;
 
 7      (5)  The project has been unable to obtain sufficient
 
 8           funding on reasonable terms through ordinary means; and
 
 9      (6)  The project can be partially financed through ordinary
 
10           means at reasonable terms.
 
11 The development corporation shall not acquire securities to an
 
12 extent that would provide the development corporation effective
 
13 voting control of any enterprise after giving effect to the
 
14 conversion of all outstanding convertible securities of the
 
15 enterprise.
 
16      (e)  Investments by the development corporation to persons
 
17 shall be made on the basis of solicitation and a competitive
 
18 technical review process, subject to the availability of funds
 
19 allocated to the development corporation for making investments.
 
20 Investments by the development corporation shall not be subject
 
21 to chapter 42F.  Any organization applying for an investment
 
22 shall meet the following standards:
 
23      (1)  Have bylaws or policies that describe the manner in
 

 
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 1           which business is conducted and policies relating to
 
 2           nepotism and management of potential conflict of
 
 3           interest situations;
 
 4      (2)  Be licensed and accredited, as applicable, in
 
 5           accordance with the requirements of federal, state, and
 
 6           county governments;
 
 7      (3)  Comply with applicable federal and state laws
 
 8           prohibiting discrimination against any person on the
 
 9           basis of race, color, national origin, religion, creed,
 
10           sex, age, or physical handicap; and
 
11      (4)  Comply with other requirements as the board may
 
12           prescribe.
 
13      § -45  Business and industry evaluation and priorities for
 
14 job opportunity and economic development.  The development
 
15 corporation shall develop procedures to set priorities as to
 
16 which types of businesses and industries are most likely to
 
17 provide significant opportunities for economic development and
 
18 diversification in the State, consistent with the purposes of
 
19 this chapter.  This evaluation shall take into account the
 
20 guidelines provided by the state plan for economic development.
 
21 Based on these findings, the development corporation shall
 
22 establish targets by which the operations and programs of the
 
23 development corporation shall be guided.
 

 
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 1      § -46  Confidentiality of trade secrets or the like;
 
 2 disclosure of financial information.  Notwithstanding chapter 92,
 
 3 92F, or any other law to the contrary, any documents or data made
 
 4 or received by any member or employee of the development
 
 5 corporation, to the extent that the material or data consist of
 
 6 trade secrets, commercial or financial information regarding the
 
 7 operation of any business conducted by an applicant for, or
 
 8 recipient of, any form of assistance that the development
 
 9 corporation is empowered to render, or regarding the competitive
 
10 position of that applicant in a particular field of endeavor,
 
11 shall not be a public record; provided that if the development
 
12 corporation purchases a qualified security from an applicant, the
 
13 commercial and financial information, excluding confidential
 
14 business information, shall be deemed to become a public record
 
15 of the development corporation.  If the information is made or
 
16 received by any member or employee of the development corporation
 
17 after the purchase of the qualified security, it shall become a
 
18 public record three years from the date the information was made
 
19 or received.  Any discussion or consideration of trade secrets or
 
20 commercial or financial information, shall be held by the board,
 
21 or any subcommittee of the board, in executive sessions closed to
 
22 the public; provided that the purpose of any such executive
 
23 session shall be set forth in the official minutes of the
 

 
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 1 development corporation and business that is not related to that
 
 2 purpose shall not be transacted, nor shall any vote be taken
 
 3 during the executive sessions.
 
 4      § -47  Requests for assistance from corporation;
 
 5 procedure.(a)  The board shall approve or disapprove requests
 
 6 for assistance within ninety days of receiving a written
 
 7 application.  Upon written request by an applicant, the board may
 
 8 reconsider its denial of an application for assistance or may
 
 9 waive the ninety-day deadline for approving or disapproving an
 
10 application.
 
11      (b)  Any person who submits any statement, report,
 
12 application, or other document to the development corporation
 
13 that is known to the person to be false in any material respect
 
14 shall be guilty of a class C felony.
 
15      (c)  The development corporation may condition any
 
16 assistance of any type by placing restrictions on the recipient
 
17 in regard to the recipient's assets or indebtedness or in any
 
18 other manner deemed appropriate by the development corporation.
 
19 A recipient who accepts assistance from the development
 
20 corporation shall be deemed to agree to be bound by any
 
21 conditions or restrictions imposed by the development
 
22 corporation.
 
23      § -48  Private sector financial support.  Significant
 

 
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 1 private sector financial support shall be associated with any
 
 2 economic development project for which the development
 
 3 corporation provides assistance under this part.
 
 4      § -49  Limitations on debt owed to corporation.  Not more
 
 5 than $5,000,000 in financial assistance, excluding rights and
 
 6 royalties under a venture capital agreement, shall be provided to
 
 7 any one enterprise at any time.  The direct investments of the
 
 8 development corporation shall not exceed five per cent of the
 
 9 assets of the development corporation, excluding rights and
 
10 royalties under a venture capital agreement; provided that by a
 
11 two-thirds vote of the board this amount may be increased to a
 
12 limit of twenty-five per cent of the total assets of the
 
13 corporation.
 
14      § -50  Limitation on liability.  Chapters 661 and 662 or
 
15 any other law to the contrary notwithstanding, nothing in this
 
16 chapter shall create an obligation, debt, claim, cause of action,
 
17 claim for relief, charge, or any other liability of any kind
 
18 whatsoever in favor of any person or entity, without regard to
 
19 whether that person or entity receives any benefits under this
 
20 chapter, against the State or its officers and employees.  The
 
21 State and its officers and employees shall not be liable for the
 
22 results of any investment, purchase of securities, loan, or other
 
23 assistance provided pursuant to this chapter.  Nothing in this
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1 chapter shall be construed as authorizing any claim against the
 
 2 development corporation in excess of any note, loan, or other
 
 3 specific indebtedness incurred by the development corporation or
 
 4 in excess of any insurance policy acquired for the development
 
 5 corporation or its employees.
 
 6                SUBPART B.  SEED CAPITAL ASSISTANCE
 
 7      § -51  Seed capital investments.  Subject to this part,
 
 8 the development corporation may invest in:
 
 9      (1)  A certified development company under sections 501 to
 
10           503 of the Small Business Investment Act of 1958,
 
11           title 15 United States Code sections 695 to 697, and
 
12           the regulations adopted under those sections;
 
13      (2)  A small business investment company under the Small
 
14           Business Investment Act, title 15 United States Code
 
15           sections 631 to 634, 636 to 649, and the regulations
 
16           adopted under those sections;
 
17      (3)  A minority enterprise small business investment
 
18           corporation or equivalent venture capital corporation;
 
19      (4)  A similar entity that may leverage its capital under a
 
20           federal program; or
 
21      (5)  A seed capital fund or partnership.
 
22      § -52  Purposes and terms of investments.  (a)
 
23 Investments may be used for any purpose consistent with the
 

 
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 1 purposes and objectives of this part, including but not limited
 
 2 to:
 
 3      (1)  Developing a working prototype;
 
 4      (2)  Preparing a development plan;
 
 5      (3)  Performing an initial market analysis;
 
 6      (4)  Organizing a management team; and
 
 7      (5)  Any other purpose reasonably related to an economic
 
 8           development project.
 
 9      (b)  Investments may be made on the terms and conditions
 
10 that the development corporation determines to be reasonable,
 
11 appropriate, and consistent with the purposes and objectives of
 
12 this part.
 
13              SUBPART C.  VENTURE CAPITAL ASSISTANCE
 
14      § -53  Venture capital investments.  Subject to this part,
 
15 the development corporation may invest in:
 
16      (1)  A certified development company under sections 501 to
 
17           503 of the Small Business Investment Act of 1958,
 
18           title 15 United States Code sections 695 to 697, and
 
19           the regulations adopted under those sections;
 
20      (2)  A small business investment company under the Small
 
21           Business Investment Act, title 15 United States Code
 
22           sections 631 to 634, 636 to 649, and the regulations
 
23           adopted under those sections;
 

 
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 1      (3)  A minority enterprise small business investment
 
 2           corporation or equivalent venture capital corporation;
 
 3      (4)  A similar entity that may leverage its capital under a
 
 4           federal program; or
 
 5      (5)  A venture capital fund or partnership.
 
 6      § -54  Purposes and terms of investments.  (a)
 
 7 Investments may be used for any purpose consistent with the
 
 8 purposes and objectives of this part.
 
 9      (b)  Investments may be made on the terms and conditions
 
10 that the development corporation determines to be reasonable,
 
11 appropriate, and consistent with the purposes and objectives of
 
12 this part.
 
13                    SUBPART D.  CAPITAL ACCESS
 
14      § -55  Financial assistance.  The development corporation
 
15 may:
 
16      (1)  Procure insurance, a guarantee, or a letter of credit
 
17           from any source for all or a part of a loan, debenture,
 
18           or lease of others, public or private, or a revenue
 
19           bond issue of the State or other entity or authority
 
20           authorized by law to issue revenue bonds; and
 
21      (2)  Procure insurance, a guarantee, or a letter of credit
 
22           for either a single loan, debenture, or lease or for
 
23           any combination of loans, debentures, or leases, or a
 

 
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 1           single revenue bond issue or for all or a part of any
 
 2           combination of revenue bond issues.
 
 3      § -56  Purposes and priorities required in the procuring
 
 4 of insurance, loan guarantees, or letters of credit.(a)
 
 5 Insurance, guarantees, or letters of credit procured pursuant to
 
 6 section    -55 shall be procured only for economic development
 
 7 projects within the State that are consistent with the purposes
 
 8 and objectives of this part.
 
 9      (b)  The development corporation shall give paramount
 
10 priority in procuring insurance, guarantees, and letters of
 
11 credit to economic development projects that have the greatest
 
12 potential for creating new jobs or retaining current jobs within
 
13 the State.
 
14      § -57  Conditions for procuring of insurance, loan
 
15 guarantees, or letters of credit.  (a)  Insurance, guarantees, or
 
16 letters of credit shall not be procured pursuant to section
 
17    -55 unless the development corporation is assured that the
 
18 loans, debentures, or leases insured, or guaranteed, or for which
 
19 letters of credit are issued, shall be used to assist economic
 
20 development projects that also have significant private sector
 
21 financial support.
 
22      (b)  Insurance, guarantees, or letters of credit may be
 
23 procured on the terms and conditions that the development
 

 
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 1 corporation, in its sole discretion, shall determine to be
 
 2 reasonable, appropriate, and consistent with the purposes and
 
 3 objectives of this chapter.
 
 4      (c)  The development corporation shall charge the lender or
 
 5 the borrower, or both, a fee or premium for procuring loan,
 
 6 debenture, or lease insurance, guarantee, or a letter of credit.
 
 7 Rules for premiums or fees shall be established by the
 
 8 development corporation.
 
 9      § -58  Capital access participation agreements.  The
 
10 development corporation shall enter into agreements with lenders
 
11 for participation in capital access that shall include but not be
 
12 limited to:
 
13      (1)  Authorization for the lender to determine, collect, and
 
14           transmit to the development corporation a fee or
 
15           premium charge within a specified range established
 
16           consistent with the purposes and objectives of the
 
17           development corporation;
 
18      (2)  Specification of whether the premium charge shall be
 
19           paid by the lender, the borrower, the development
 
20           corporation, or by a combination thereof in specified
 
21           proportions;
 
22      (3)  The procedure by which a lender may make a claim upon
 
23           the development corporation upon default by the
 

 
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 1           borrower, and the conditions under which a claim may be
 
 2           made; and
 
 3      (4)  The maximum amount of claims a lender may make upon the
 
 4           development corporation, which amount may be equal to
 
 5           or less than the proportion of the total premiums
 
 6           contributed by the development corporation.
 
 7      § -59  Establishment of special funds to secure loan
 
 8 insurance obligations; source of funds.  The development
 
 9 corporation may establish a special fund or funds for capital
 
10 access into which fees or premiums collected by the development
 
11 corporation are deposited.
 
12           PART IV.  NATURAL ENERGY LABORATORY OF HAWAII
 
13      § -71  Natural energy laboratory of Hawaii; establishment;
 
14 purpose.(a)  There is established the natural energy laboratory
 
15 of Hawaii within the development corporation.
 
16      (b)  The purpose of the natural energy laboratory of Hawaii
 
17 shall be to facilitate research, development, and
 
18 commercialization of natural energy resources and ocean-related
 
19 research, technology, and industry in Hawaii and to engage in
 
20 retail, commercial, or tourism activities that will financially
 
21 support that research, development, and commercialization at a
 
22 research and technology park in Hawaii.
 
23      §   -72  Duties.  The laboratory shall:
 

 
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 1      (1)  Establish, manage, and operate facilities that provide
 
 2           sites for:
 
 3           (A)  Research and development;
 
 4           (B)  Commercial projects and businesses utilizing
 
 5                natural resources, such as ocean water or
 
 6                geothermal energy;
 
 7           (C)  Compatible businesses engaged in scientific and
 
 8                technological investigations, or retail,
 
 9                commercial, and tourism activities; and
 
10           (D)  Businesses or educational facilities that support
 
11                the primary projects and activities;
 
12      (2)  Provide support, utilities, and other services to
 
13           facility tenants and government agencies;
 
14      (3)  Maintain the physical structure of the facilities;
 
15      (4)  Promote and market these facilities;
 
16      (5)  Promote and market the reasonable utilization of
 
17           available natural resources, including geothermal
 
18           energy and natural resources site; and
 
19      (6)  Engage in retail, commercial, and tourism activities
 
20           that are not related to facilitating research,
 
21           development, and commercialization of natural energy
 
22           resources in Hawaii; provided that all income derived
 
23           from these activities shall be deposited in the natural
 

 
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 1           energy laboratory of Hawaii special fund.
 
 2      § -73  Research advisory committee.  The board shall
 
 3 appoint a research advisory committee pursuant to section    -3
 
 4 for the purpose of obtaining expert and specialized counsel and
 
 5 advice on matters relating to scientific research and may include
 
 6 as members of the committee officers and employees of any
 
 7 government department or agency or members of the scientific
 
 8 community; provided that at least two members of the board shall
 
 9 be on the committee.  The laboratory may assign its own staff to
 
10 aid and assist the committee and may reimburse any member of the
 
11 committee for necessary expenses incurred in the performance of
 
12 the member's work for the laboratory.
 
13      § -74  Special fund.  There is established in the state
 
14 treasury a fund to be known as the natural energy laboratory of
 
15 Hawaii special fund, into which shall be deposited all moneys and
 
16 fees from tenants or other users of the laboratory's parks,
 
17 projects, other leased facilities, and other services and
 
18 publications as well as any grants or gifts received by the
 
19 laboratory.  All moneys in the fund shall be expended by the
 
20 laboratory for the operation, maintenance, and management of its
 
21 parks, projects, facilities, services, and publications, and for
 
22 the design and construction of new facilities and the renovation
 
23 of or addition to existing facilities."
 

 
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 1      SECTION 2.  Section 27-41, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (b) to read as follows:
 
 3      "(b)  The duties of the special advisor shall include but
 
 4 not be limited to:
 
 5      (1)  Developing, coordinating, and implementing short- and
 
 6           long-range state policies and directions to enhance the
 
 7           development of high technology industries in Hawaii;
 
 8      (2)  Coordinating all state high technology agencies while
 
 9           [developing a plan for reorganization or consolidation
 
10           of these agencies in the interests of greater
 
11           efficiency and cost effectiveness;] serving as the
 
12           chairperson of the board of directors of the high
 
13           technology development corporation pursuant to section
 
14              -3;
 
15      (3)  Advising the private sector in the development of high
 
16           technology activities and resources and providing
 
17           technical or other assistance to private industry upon
 
18           request;
 
19      (4)  Creating, disseminating, and updating a listing of all
 
20           high technology assistance programs in the State and
 
21           where they can be reached;
 
22      (5)  Pursuing appropriate public-private sector business
 
23           partnerships;
 

 
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                                     S.B. NO.           2708
                                                        
                                                        

 
 1      (6)  Coordinating the State's promotion and marketing of the
 
 2           high technology industry, including a review of current
 
 3           marketing efforts;
 
 4      (7)  Arranging for the conduct of research through
 
 5           contractual services with the University of Hawaii or
 
 6           any agency or other qualified persons;
 
 7      (8)  Encouraging the development of educational, training,
 
 8           and career programs in high technology industries; and
 
 9      (9)  Performing other necessary or desirable functions to
 
10           facilitate the intent of this section."
 
11      SECTION 3.  Chapter 206M, Hawaii Revised Statutes, is
 
12 repealed.
 
13      SECTION 4.  Chapter 206P, Hawaii Revised Statutes, is
 
14 repealed.
 
15      SECTION 5.  Chapter 211F, Hawaii Revised Statutes, is
 
16 repealed.
 
17      SECTION 6.  Chapter 227D, Hawaii Revised Statutes, is
 
18 repealed.
 
19      SECTION 7.  Subpart L of part II of chapter 304, Hawaii
 
20 Revised Statutes, is repealed.
 
21      SECTION 8.  All moneys contained in the high technology
 
22 special fund created pursuant to section 206M-15.5, Hawaii
 
23 Revised Statutes, on the effective date of this Act shall be
 

 
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 1 transferred to the high technology special fund created pursuant
 
 2 to section    -17, Hawaii Revised Statutes.
 
 3      SECTION 9.  All moneys contained in the Hawaii strategic
 
 4 development corporation revolving fund created pursuant to
 
 5 section 211F-5, Hawaii Revised Statutes, on the effective date of
 
 6 this Act shall be transferred to the Hawaii strategic development
 
 7 corporation revolving fund created pursuant to section    -43,
 
 8 Hawaii Revised Statutes.
 
 9      SECTION 10.  All moneys contained in the special fund
 
10 created pursuant to section 227D-5, Hawaii Revised Statutes, on
 
11 the effective date of this Act shall be transferred to the
 
12 special fund created pursuant to section    -74, Hawaii Revised
 
13 Statutes.
 
14      SECTION 11.  All rights, powers, functions, and duties of
 
15 the high technology development corporation, the Hawaii strategic
 
16 development corporation, and the natural energy laboratory of
 
17 Hawaii authority are transferred to the high technology
 
18 development corporation, University of Hawaii.
 
19      All officers and employees whose functions are transferred
 
20 by this Act shall be transferred with their functions and shall
 
21 continue to perform their regular duties upon their transfer,
 
22 subject to the state personnel laws and this Act.
 
23      No officer or employee of the State having tenure shall
 

 
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 1 suffer any loss of salary, seniority, prior service credit,
 
 2 vacation, sick leave, or other employee benefit or privilege as a
 
 3 consequence of this Act, and the officer or employee may be
 
 4 transferred or appointed to a civil service position without the
 
 5 necessity of examination; provided that the officer or employee
 
 6 possesses the minimum qualifications for the position to which
 
 7 transferred or appointed; and provided that subsequent changes in
 
 8 status may be made pursuant to applicable civil service and
 
 9 compensation laws.
 
10      An officer or employee of the State who does not have tenure
 
11 and who may be transferred or appointed to a civil service
 
12 position as a consequence of this Act shall become a civil
 
13 service employee without the loss of salary, seniority, prior
 
14 service credit, vacation, sick leave, or other employee benefits
 
15 or privileges and without the necessity of examination; provided
 
16 that the officer or employee possesses the minimum qualifications
 
17 for the position to which transferred or appointed.
 
18      In the event that an office or position held by an officer
 
19 or employee having tenure is abolished, the officer or employee
 
20 shall not thereby be separated from public employment, but shall
 
21 remain in the employment of the State with the same pay and
 
22 classification and shall be transferred to some other office or
 
23 position for which the officer or employee is eligible under the
 

 
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 1 personnel laws of the State as determined by the head of the
 
 2 department or the governor.
 
 3      SECTION 12.  All appropriations, records, equipment,
 
 4 machines, files, supplies, contracts, books, papers, documents,
 
 5 maps, and other personal property heretofore made, used,
 
 6 acquired, or held by the high technology development corporation,
 
 7 the Hawaii strategic development corporation, and the natural
 
 8 energy laboratory of Hawaii authority relating to the functions
 
 9 transferred to the high technology development corporation,
 
10 University of Hawaii shall be transferred with the functions to
 
11 which they relate.
 
12      SECTION 13.  It is the intent of this Act not to jeopardize
 
13 the receipt of any federal aid nor to impair the obligation of
 
14 the State or any agency thereof to the holders of any bond issued
 
15 by the State or by any such agency, and to the extent, and only
 
16 to the extent, necessary to effectuate this intent, the governor
 
17 may modify the strict provisions of this Act, but shall promptly
 
18 report any such modification with reasons therefor to the
 
19 legislature at its next session thereafter for review by the
 
20 legislature.
 
21      SECTION 14.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 
23      SECTION 15.  This Act shall take effect on July 1, 2000.
 

 
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 1 
 
 2                       INTRODUCED BY:  ___________________________