STAND. COM. REP. NO. 1010

Honolulu, Hawaii

RE:    S.B. No. 1365

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1365, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE INNOVATION ECONOMY,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require the Employees' Retirement System to have $100,000,000 allocated for Hawaii venture capital investments, unless it is not prudent to do so; and

     (2)  Appropriate funds to the University of Hawaii Office of Technology Transfer and Economic Development to enter into a partnership with a private sector entity.

     The Employees' Retirement System (ERS), Economic Development Alliance of Hawaii, Applied Marine Solutions, Oceanit, and three individuals provided written comments on this measure.

     Your Committee finds that increasing opportunities for Hawaii companies to attract venture capital is often critical to their survival and is certainly a strong contributing factor in successfully building a business.  Your Committee has heard the concerns of the ERS, but believes that there is enough agreement by all parties on the importance of diversification and building economic sustainability in Hawaii.

     Your Committee has amended this measure for the purposes of continuing the discussion between the Legislature and the ERS, by:

     (1)  Requiring the ERS to consider Hawaii venture capital investment opportunities, unless it is not prudent to do so; and

     (2)  Specifying that the ERS system shall allocate an undesignated percentage of funds for Hawaii venture capital investments, unless it is not prudent to do so.

     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. 1365, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1365, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair