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. 1696, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to encourage venture capital investments in privately-held Hawaii companies by allowing fiduciaries to invest up to two and one-half percent of their funds eligible for investment, but not more than ten percent of their capital, in Hawaii venture capital investments without being in contravention of any prudent person or prudent investor rule.

The Department of Business, Economic Development, and Tourism and a concerned individual testified in support of the bill. The Employees' Retirement System testified in opposition to this measure.

Your Committee finds that an obstacle to institutional venture capital investment in privately-held Hawaii companies is the prudent investor or prudent person rule. Your Committee further recognizes that this measure may provide multiple benefits to Hawaii by:

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. 1696, S.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection & Commerce.