STAND. COM. REP. NO. 742

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1607
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 1607, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT AND
     PRIVATE INVESTMENT ATTRACTION,"

begs leave to report as follows:

     The purpose of this bill is to appropriate an unspecified
amount to the Hawaii Strategic Development Corporation revolving
fund for investments primarily in high technology companies.

     The Hawaii Strategic Development Corporation was established
to develop a sustainable venture capital industry in the State.
The Corporation has leveraged its inital appropriation of
$5,250,000 over ten times with private investment generating
$58,000,000 of venture capital for Hawaii companies.  These
twenty-one companies have created five hundred jobs.

     The Hawaii Strategic Development Corporation has depleted
its initial investment resources as the seed funding for these
start-up companies has not yet generated financial returns.
Additional appropriations are needed if the Corporation is to
maintain its momentum.

     Your Committee finds that appropriating funds to the Hawaii
Strategic Development Corporation revolving fund has been an

 
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                                   STAND. COM. REP. NO. 742
                                   Page 2


effective way to generate venture capital.  Your Committee also
finds that an additional appropriation will allow the Corporation
to continue to be a resource for new viable businesses in the
State.

     Your Committee has amended this bill by prohibiting the
Department of Business, Economic Development, and Tourism from
restricting funds in the Hawaii Strategic Development Corporation
revolving fund.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.
No. 1607, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1607,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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