Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1695, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the Hawaii Strategic Development Corporation to issue $100,000,000 in tax credits to implement the State Private Investment Fund, created under Act 215, Session Laws of Hawaii 2004.

Your Committee finds that the State Private Investment Fund was established to build a stronger venture capital community in Hawaii and to keep the local high technology industry at home. The State Private Investment Fund addresses the larger capital needs of companies in their second and third stages of funding when companies experience their greatest growth. At these stages, companies are adding hundreds of new employees and need substantial financing that is often times not available locally.

Based on a local study, it is estimated that existing start-up and emerging companies in the high technology industry will require $223,000,000 from Hawaii and external sources over the next five years. The State Private Investment Fund represents the means to obtain that level of financing.

Your Committee has amended the bill by:

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. 1695, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1695, S.D. 2.