Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Business and Economic Development, to which was referred S.B. No. 719 entitled:

begs leave to report as follows:

The purpose of this measure is to improve government efficiency by merging the State's business financing programs, the Hawaii Capital Loan Program and the Hawaii Strategic Development Corporation, into a single financial assistance entity to be administered by the Department of Business, Economic Development, and Tourism.

Testimony in support of this measure was submitted by the Department of Business, Economic Development, and Tourism.

Your Committee finds that creating a single financing program from existing programs will facilitate issuing and administering loans to businesses that do not meet the criteria for conventional lending services. The Hawaii Capital Loan Program offers capital to young businesses that have contracts but do not qualify for bank loans and the Hawaii Strategic Development Corporation provides equity growth financing through venture capital funds to new technology firms. Your Committee believes that this measure ensures that the State will continue to offer a range of financing options to new and developing businesses and that the program will be strengthened by coordinating the two entities' resources under a single program.

Your Committee has amended this measure by inserting a definition of "corporation" and by making technical, non-substantive amendments for the purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Business and Economic Development that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 719, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 719, S.D. 1, and be referred to the Committee on Ways and Means.