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. 1696 entitled:

begs leave to report as follows:

The purpose of this measure is to encourage venture capital investment into privately-held Hawaii companies.

Your Committee finds that an obstacle to the investment of venture capital into privately-held Hawaii companies is the prudent investor or person rule. This measure will protect fiduciaries that make venture capital investments in Hawaii companies of up to two and one half per cent of their available funds, but not more ten per cent of their capital, from liability under the prudent investor or person rule.

Your Committee has amended this measure 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. 1696, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1696, S.D. 1.