HB2395 SD2

PART I

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII INNOVATION DEVELOPMENT CORPORATION

§ ‑1 Definitions. As used in this chapter, unless the context requires otherwise:

"Board" means the board of directors of the Hawaii innovation development corporation.

"Development corporation" means the Hawaii innovation development corporation.

"Innovation" means any new product or invention. "Invention" means any new process or technique for which a patent has been granted or, in the opinion of the board, the chance of obtaining a patent is favorable.

"Inventor" means any creator of intellectual property whose work may result in the grant of a patent, copyright, trademark, or other type of intellectual property.

"Labor organization" means a formally organized association of workers who have united to represent their collective views on wages, hours, and working conditions.

"Product" means any device, technique, or process that is or may be exploitable commercially and has advanced beyond the theoretical state and is readily capable of being or has been reduced to practice, except for pure research.

§ ‑2 Hawaii innovation development corporation; establishment. There is established the Hawaii innovation development corporation, which shall be a public body and a body corporate and politic. The development corporation shall be placed within the department of business, economic development, and tourism for administrative purposes. The purpose of the development corporation shall be to promote the development and exploitation of innovations or inventions that have direct economic benefits for Hawaii.

§ ‑3 Board of directors. (a) The governing body of the development corporation shall consist of a board of directors. The board shall consist of:

(1) Six voting members, appointed by the governor for staggered terms pursuant to section 26‑34. The members shall be selected on the basis of their knowledge, interest, and proven expertise in one or more of the following fields: education, labor, finance, marketing, commerce and trade, and other innovation or invention related fields; provided that at least:

(A) One member shall represent inventors;

(B) One member shall represent teachers; and

and

(2) The director of business, economic development, and tourism, the director of finance, and an appointed member from the board of the Hawaii strategic development corporation, or their designated representatives, who shall serve as ex officio voting members.

(b) The director of business, economic development, and tourism shall serve as the chairperson until a chairperson is elected by the board from the membership. The board may elect other officers as it deems necessary.

(c) The members of the board shall serve without compensation, but may be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.

(d) The board shall appoint and set the salary and duties of the chief executive officer. The chief executive officer shall serve at the pleasure of the board and shall be exempt from chapters 76 and 89.

(e) The board may appoint an advisory committee as the board deems necessary in furtherance of this chapter. The advisory committee members shall serve without compensation, but may be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.

§ ‑4 Meetings of the board. (a) The board shall be subject to chapter 92.

(b) The board shall be exempt from sections 26‑35(a)(4) and (5).

§ ‑5 Powers; generally. The development corporation shall have the powers necessary to carry out its purpose, including the general power to:

(1) Sue and be sued;

(2) Adopt, amend, and repeal bylaws for its organization and internal administration;

(3) Acquire in any lawful manner any property, real, personal, or mixed, tangible or intangible, or any interest therein; to hold, maintain, use, and operate that property; and to sell, lease, or otherwise dispose of that property at a time, in a manner, and to the extent deemed necessary or appropriate to carry out its purposes;

(4) Enter into and perform contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of its business and on terms it may deem appropriate, with any agency or instrumentality of the United States, with any state, territory, or possession, or with any political subdivision thereof, or with any person, firm, association, or corporation;

(5) Determine the character of and the necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid;

(6) Execute, in accordance with its bylaws, all instruments necessary or appropriate in the exercise of any of its powers;

(7) Adopt rules in accordance with chapter 91 necessary to effectuate this chapter; and

(8) Do any and all things necessary or convenient to carry out its purposes and exercise the powers granted in this chapter.

§ ‑6 Innovations and inventions revolving fund. (a) There is established an innovations and inventions revolving fund into which shall be deposited appropriations by the legislature subject to the approval of the governor, proceeds from the development and commercial exploitation of innovations and inventions, fees collected, and grants from public agencies and private persons for the purposes of developing and exploiting innovations and inventions that have direct economic benefits for Hawaii, including patenting, copyrighting, licensing, and marketing innovations and inventions.

(b) The fund shall be used by the development corporation to develop and exploit innovations and inventions that have direct economic benefits for Hawaii.

§ ‑7 Exemption from taxation. All revenues and receipts derived by the development corporation from the development and exploitation of innovations and inventions, or under an agreement pertaining thereto, shall be exempt from all state and county taxation. Any right, title, and interest of the development corporation in any innovation or invention shall also be exempt from all state and county taxation.

§ ‑8 Confidentiality. Notwithstanding any other law to the contrary, any documents or data made or received by any member or employee of the development corporation shall be confidential to the extent that the document or data consists of trade secrets or other proprietary information. For purposes of this chapter, the term "proprietary information" includes information that could be protected as intellectual property, such as by copyright or patent.

§ ‑9 Limitation on liability. Notwithstanding any other law to the contrary, nothing in this chapter shall create an obligation, debt, claim, cause of action, claim for relief, charge, or any other liability of any kind whatsoever in favor of any person or entity, against the State or its officers and employees, without regard to whether that person or entity receives any benefits under this chapter. The State and its officers and employees shall not be liable for the results of any investment, purchase of securities, loan, or other assistance provided pursuant to this chapter. Nothing in this chapter shall be construed as authorizing any claim against the development corporation in excess of any note, loan, or other specific indebtedness incurred by the development corporation or in excess of any insurance policy acquired for the development corporation or its employees.

§ ‑10 Annual report. The Hawaii innovation development corporation shall submit a report to the legislature no later than twenty days prior to the convening of each regular session on the implementation of this chapter."

PART II

SECTION 2. In early 2007, the National Governors Association made improving the nation's economic competitiveness through innovation its primary focus. In a report titled, "A Benchmarking of the Hawaii Educational System", Monitor Group and the National Governors Association Center for Best Practices profiled how Hawaii's educational system was performing relative to national averages. Although Hawaii's high school graduation rate is close to the national average (about seventy per cent compared with seventy-five per cent), its postsecondary completion rate was six points below the national average (forty-seven per cent compared against fifty-three per cent), and twenty points below the highest-performing states. The report states,". . . [t]his statistic measures state universities' success in helping as many students through the system as possible. As the importance of a college education grows . . . so does the relevance of this metric in assessing a state's educational performance." Similar differences were found in eighth grade National Assessment of Educational Progress test scores for 2004-2005, SAT scores and Advanced Placement course participation rates.

The 2007 legislature strongly endorsed Science-Technology-Engineering-Math (STEM)-related initiatives and creative media education as the most practical, hands-on means of increasing students' interest in pursuing math/science and technology careers. All STEM proposals were evaluated against the backdrop of existing, successful math/science and related initiatives. Emphasizing the need to build upon solid performance outcomes, the legislature adopted Act 111, Session Laws of Hawaii 2007, to expand existing STEM programs like robotics (including FIRST Lego League, Junior FIRST Lego League, botball, underwater ROV, VEX, Micro-Robot and robotics camps) and Research Experiences for Teachers – Middle School; and Act 271, Session Laws of Hawaii 2007, to expand Project Environmental and Spatial Technology. At the same time, Act 111 funded new programs (like the Hi-EST Academy, applied learning high school academies, business/education internships, and related STEM teacher development) in a pilot environment to provide the department of education, University of Hawaii, individual schools, and their tech partners with an opportunity to work through initial set-up requirements and to produce a well-tested model for future expansion.

The initial legislative targets for 2007-2008 were to double the existing forty-eight STEM, Research Experiences for Teachers – Middle School, Project Environmental and Spatial Technology, and robotics programs within public schools to achieve a level of eighty-four school initiatives. Based on strong demand from individual schools, and stellar tournament results, the number of schools desiring to participate in STEM initiatives funded by Act 111, Session Laws of Hawaii 2007, and Act 271, Session Laws of Hawaii 2007, far exceed the 2008 target. At the highest level of robotics team competition, the number of For Inspiration and Recognition of Science and Technology (FIRST) robotics teams has grown from four participating high schools in 2007 to twenty-five Hawaii high school teams (including public and private schools) in 2008. This year's March 2008 FIRST robotics regional tournament in Honolulu, Hawaii includes thirty-eight schools competing for the national FIRST championships (being held in April 2008 in Georgia).

The legislature therefore reaffirms its initial commitment to expand outstanding and new STEM-related programs in Hawaii's public schools and public charter schools by providing additional funds to ensure that all schools desiring to join in providing STEM programs for their students will be able to participate between 2008‑2012. The legislature also proposes to add funding support to K-12 after-school creative media education initiatives to allow for a broader range of student participation in these programs.

SECTION 3. Chapter 304A, part V, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§304A- Science technology and education special fund. (a) There is established the science technology and education special fund, for the purposes of providing additional resources and expertise to stimulate the interest and achievement of students in science, technology, engineering, and mathematics skills, pursuant to sections 304A-1861, 304A-1862, and 304A-1863.

(b) The following may be deposited into the special fund: appropriations made by the legislature, private contributions, and moneys from other sources; provided that:

(1) Moneys on balance in the special fund at the close of each fiscal year shall remain in that fund and shall not lapse to the credit of the general fund;

(2) Any amount to be deposited into the special fund from the revenues collected under this chapter that causes the special fund to exceed $ shall be deposited into the general fund. No further deposits from the revenues collected under this chapter shall be made into the special fund until the balance of the special fund drops below $ , in which event two and one-half per cent of the revenues collected under this chapter shall be deposited into the special fund until the balance equals $ ; and

(3) An amount from the special fund not exceeding five per cent of the total amount of outstanding loans may be set by the university to be used for administrative expenses incurred in administering the special fund."

SECTION 4. Act 111, Session Laws of Hawaii 2007, is amended by amending part V, section 12 to read as follows:

"SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,402,230 or so much thereof as may be necessary for fiscal year 2007-2008 and the [~~same~~] sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 to establish the fostering inspiration and relevance through science and technology pre-academy program, including nine full-time equivalent (9.00 FTE) positions in the University of Hawaii college of engineering; provided that the appropriation for fiscal year 2008-2009 shall be deposited into the science and technology and education special fund established under section 304A- , Hawaii Revised Statutes, pursuant to Act , Session Laws of Hawaii 2008, and the same sum or so much thereof as may be necessary shall be appropriated out of the science technology and education special fund for the purposes of this section; provided that the sums appropriated shall be allocated as follows:

(1) $314,925 for fiscal year 2007-2008 and the [~~same~~] sum of $ for fiscal year 2008-2009 for the robotics and problem-based, applied learning program; and

(2) $734,805 for fiscal year 2007-2008 and the [~~same~~] sum of $ for fiscal year 2008-2009 for the research experiences for teachers program.

The sums appropriated shall be expended by the University of Hawaii for the purposes of this part."

SECTION 5. Act 271, Session Laws of Hawaii 2007, is amended by amending sections 2 and 3 to read as follows:

"SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,100,000 or so much thereof as may be necessary for fiscal year 2007-2008, and the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 to be deposited into the Hawaii 3Ts school technology laboratories fund established pursuant to section 302A-1314, Hawaii Revised Statutes.

SECTION 6. There is appropriated out of the Hawaii 3Ts school technology laboratories fund the sum of $1,100,000 or so much thereof as may be necessary for fiscal year 2007-2008, and the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 to maintain the project EAST program in existing schools and to expand the program to schools statewide; provided that no funds shall be expended unless matching funds are provided pursuant to section 302A-1314(p), Hawaii Revised Statutes.

The [~~sum~~] sums appropriated shall be expended by the Economic Development Alliance of Hawaii, Inc., in accordance with section 302A-1314, Hawaii Revised Statutes, and implemented in partnership with county economic development boards, as appropriate, for the purposes of this Act."

SECTION 7. There is appropriated or authorized from the federal temporary assistance for needy families program funds the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 for the department of human services, to augment, not replace, funding for STEM programs and K-12 creative media education programs.

The sum appropriated shall be expended by the department of human services for the purposes of this part.

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 for K-12 creative media programs.

The sum appropriated shall be expended by the department of education for the purposes of this part.

SECTION 9. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 10. The revisor of statues shall insert the number of this Act in section 4 of this Act.

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on July 1, 2008.

HOUSE OF REPRESENTATIVES	H.B. NO.	2395
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII		S.D. 2