STAND. COM. REP. NO. 420-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2356
                                     H.D. 1




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

Sir:

     Your Committees on Economic Development and Business
Concerns, Higher Education, and Energy and Environmental
Protection, to which was referred H.B. No. 2356 entitled: 

     "A BILL FOR AN ACT RELATING TO THE HIGH TECHNOLOGY
     DEVELOPMENT CORPORATION,"

beg leave to report as follows:

     The purpose of this bill, as received by your Committees, is
to consolidate the State's technology industries by:

     (1)  Repealing the High Technology Development Corporation
          (HTDC) under chapter 206M, Hawaii Revised Statutes
          (HRS); the Hawaii Strategic Development Corporation
          (HSDC) under chapter 211F, HRS; and the Natural Energy
          Laboratory of Hawaii Authority (NELHA) under chapter
          227D, HRS, and establishing these three agencies under
          a newly-established HTDC within the University of
          Hawaii for administrative purposes;

     (2)  Repealing the Hawaii Telecommunications and Information
          Industries Act under chapter 206P, HRS; and

     (3)  Repealing the Pacific International Center for High
          Technology Research under subpart L of part II of
          chapter 304, HRS.


 
 
 
 
                                 STAND. COM. REP. NO. 420-00
                                 Page 2

 
     The Governor's Special Advisor of High Technology
Development, the Department of Business, Economic Development,
and Tourism (DBEDT), and HTDC testified in support of the intent
of the measure.  The HSDC Board, the Hawaii Venture Capital
Association, and two individuals testified in opposition to the
measure.  Comments were submitted by NELHA, the Office of
Information Practices, the University of Hawaii, the Hawaii
Technology Trade Association, and an individual.

     Your Committees recognize the importance of unifying
Hawaii's technology-related agencies and activities under a
single agency for greater coordination, efficiency, and cost-
effectiveness.  It is your Committees' belief that consolidation
will increase and enhance greater public-private partnerships in
the area of technology.

     Upon consideration, your Committees have amended this bill
by deleting its substance and inserting new material, the purpose
of which is to:

     (1)  Repeal HTDC under chapter 206M, HRS, and HSDC under
          chapter 211F, HRS, and consolidate these two agencies
          under a newly-established HTDC under DBEDT;

     (2)  Establish the Hawaii Venture Capital Special Fund for
          seed capital and venture capital investment in
          technology development in Hawaii;

     (3)  Create the Hawaii Technology Special Fund for the
          operations of the newly-established High Technology
          Development Corporation; and

     (4)  Require the Governor to:

          (A)  Select a management team and appoint a
               representative from the Governor's Office to
               spearhead the management team to develop
               transition plans for consolidation so the newly-
               established HTDC can be operational by July 1,
               2001; and

          (B)  Submit a progress report on the transition plans
               for consolidation to the Legislature prior to the
               Regular Session of 2001.

     As affirmed by the records of votes of the members of your
Committees on Economic Development and Business Concerns and
Higher Education and Energy and Environmental Protection that are
attached to this report, your Committees are in accord with the

 
                                 STAND. COM. REP. NO. 420-00
                                 Page 3

 
intent and purpose of H.B. No. 2356, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as H.B. No. 2356, H.D. 1, and be referred to the Committee on
Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Business
                                   Concerns and Higher Education
                                   and Energy and Environmental
                                   Protection,

                                   
                                   
                                   
                                   
                                   ______________________________
                                   ROBERT N. HERKES, Chair
                                   
                                   
                                   
                                   
______________________________     ______________________________
DAVID MORIHARA, Chair              HERMINA M. MORITA, Chair