Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Economic Development & Business Concerns, to which was referred S.B. No. 1695, S.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to support emerging and expanding businesses in Hawaii by:

to fulfill the purposes of Act 215, Session Laws of Hawaii (SLH) 2004, which established the State Private Investment Fund (SPIF) and extended and improved certain tax incentives developed for the high technology industry.

HSDC, the Hawaii Technology Trade Association, Hawaii Venture Capital Association, Hawaii Biotech, Inc., Economic Development Alliance of Hawaii, and a concerned individual testified in support of this bill. The Department of Business, Economic Development, and Tourism, Department of the Attorney General, and High Technology Development Corporation supported the intent of this measure. The Tax Foundation of Hawaii offered comments.

Your Committee finds that SPIF was established to address the critical shortage of venture capital in the state for local technology companies in their second and third stages of growth and expansion, when the need for financing is at its greatest. A study published by Enterprise Honolulu in 2003 reported that nearly 60 percent of Hawaii's small and high-growth businesses anticipated sales increases and projected venture capital demands exceeding $200,000,000 for the period of 2003-2008. SPIF provides the means by which such financing can be obtained, and assists in creating a nurturing climate for Hawaii's growing high technology industry.

As affirmed by the record of votes of the members of your Committee on Economic Development & Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1695, S.D. 2, and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection & Commerce.