Authorizes $ in tax credits to the Hawaii strategic development corporation for the purposes of Act 215, SLH 2004. (HB1723 HD2)

A BILL FOR AN ACT

SECTION 1. The legislature finds that Act 215, Session Laws of Hawaii 2004, serves an important public purpose by answering Hawaii's need for more venture capital. There is a critical shortage of seed and venture capital resources in Hawaii, and such a shortage is impairing the growth of commerce in the state. The availability of venture equity capital must be increased if Hawaii is to support its emerging high technology enterprises and allow them to expand, relocate to the state, and restructure.

Act 215, codified as chapter 211G, Hawaii Revised Statutes, provides a significant advance in capital formation for Hawaii's emerging technology firms and other fledgling, expansion-oriented companies. The contingent tax credits in Act 215 will be used by the Hawaii strategic development corporation to secure corporation loans to be invested in venture capital funds. By increasing return-driven, venture capital investments in emerging enterprises, Act 215 will help to diversify the state's economic base and will also benefit Hawaii's local venture capital companies by helping them build strong track records, enabling them to attract additional capital.

The purpose of this Act is to increase the availability of venture capital in Hawaii by:

SECTION 2. The corporation is issued tax credits in the amount of $ and is authorized to freely transfer those credits pursuant to section 211G-12, Hawaii Revised Statutes, to carry out the provisions of this Act.

The corporation shall limit the transfer of tax credits that may be claimed and used to reduce the tax otherwise imposed by chapter 235, 241, or 431 for one fiscal year (including any tax credits that are carried over by a taxpayer from a prior fiscal year and used to reduce taxes otherwise imposed in the current fiscal year, as permitted in section 211G-12(g), Hawaii Revised Statutes), to not more than an aggregate total of $20,000,000 per fiscal year.

SECTION 3. The corporation is authorized to extend financial guarantees pursuant to section 211G-13, Hawaii Revised Statutes.

SECTION 4. The corporation is authorized to incur indebtedness in the amount of $ or whatsoever amount of credits is issued to the corporation pursuant to section 211G-14, Hawaii Revised Statutes, to carry out the provisions of this Act.

SECTION 5. There is appropriated out of the capital formation revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2005-2006 to be expended by the Hawaii strategic development corporation in carrying out the purposes of chapter 211-G, Hawaii Revised Statutes.

SECTION 6. This Act shall take effect on July 1, 2099.