STAND. COM. REP. NO.  130-08

Honolulu, Hawaii

                , 2008

RE:   H.B. No. 2415

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committee on Economic Development & Business Concerns, to which was referred H.B. No. 2415 entitled:

"A BILL FOR AN ACT RELATING TO HIGH TECHNOLOGY,"

begs leave to report as follows:

     The purpose of this bill is to help small businesses move their innovative ideas and new technology from concept to commercialization by improving the High Technology Development Corporation (HTDC) matching grant program.  Specifically, this bill:

(1)  Removes the $25,000 cap on matching grants to allow grants of up to 50 percent of moneys awarded to a small business by the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs;

(2)  Replaces the preference for STTR and SBIR awardees who have received an award for the first time in a fiscal year and who may be multiple grant recipients, with a preference for first-time-ever SBIR and STTR awardees; and

(3)  Allows HTDC to use its discretion as to whether it will request a transfer of funds from the Hawaii Capital Loan Revolving Fund when funds appropriated for grants do not satisfy all qualified requests.

HTDC and the Hawaii Aquaculture Association supported this bill.  The Department of Business Economic Development, and Tourism supported the intent of this measure.

The HTDC matching grant program provides matching grants to small businesses who have been awarded federal SBIR and STTR Phase I awards, which allow businesses to explore the technical merit and feasibility of promising ideas or technology.   When the matching grant program was created 19 years ago, the SBIR Phase I award was $50,000, and the state matching grant maximum was $25,000, or 50 percent of the SBIR award.  Currently, SBIR Phase I awards average $100,000 or more.

This measure removes the $25,000 limit on grants for SBIR Phase I awardees, again allowing the maximum matching grant to be 50 percent of the SBIR award.  The $25,000 limit has also been removed for STTR awards, while the grant limit of 50 percent of the STTR award has been retained.

Your Committee has amended this bill by changing its effective date to July 1, 2034 to encourage further discussion.

     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 H.B. No. 2415, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2415, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Business Concerns,

____________________________

KYLE T. YAMASHITA, Chair