STAND. COM. REP. NO. 896

Honolulu, Hawaii

RE:    S.B. No. 761

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 761, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO BUSINESS DEVELOPMENT,"

begs leave to report as follows:

     The purpose and intent of this measure is to appropriate moneys necessary to continue programs under the HI Growth Initiative.

     Your Committee received written comments in support of this measure from the Natural Energy Laboratory of Hawaii Authority, High Technology Development Corporation, Hawaii Strategic Development Corporation, Chamber of Commerce Hawaii, Impact Hub Honolulu, Maui Chamber of Commerce, Fluid Studios, Referentia Systems, Inc., GVS Transmedia Accelerator, LLC, Hawaii Wild Side, LLC, Dev League, LLC, Global Net Productions, Inc., LifeNet Media Resources, Inc., Ring of Fire Films, Inc., Radial3D, Inc., Twenty20 Sound, Honua Studios, Tow Choice, Kapalya, Inc., Kite Kids, Inc., and fifteen individuals.

     Your Committee received written comments on this measure from one individual.

     Your Committee finds that the State's economic future is dependent upon a diversification of the State's economy.  The HI Growth Initiative was implemented in 2013 by the Hawaii Strategic Development Corporation to achieve the State's economic development objectives to transform and maintain Hawaii as a place that welcomes and facilitates economic activity.  The Initiative has funded over sixty-five start-up businesses in Hawaii.  In 2016, the Economic Research Organization at the University of Hawaii reported that the Initiative provided twelve times the leverage on state dollars.

     Your Committee also finds that the Hawaii Strategic Development Corporation has not received any new funding since 2013 and, as a result, has not been able to develop new investments initiatives.  The Corporation projects that, without additional funding, it will no longer be able to support the continued activities of its accelerator programs.

     Your Committee further finds that a technicality prevented a previous appropriation of $1,000,000 in the Supplemental Appropriations Act of 2016 for the HI Growth Initiative, from being expended.

     Your Committee has amended this measure by:

(1)  Force lapsing the $1,000,000 general fund appropriation for fiscal year 2016-2017 made in the Supplemental Appropriations Act of 2016 that could not be expended because of a technicality;

(2)  Providing a general fund appropriation of $1,000,000 for fiscal year 2017-2018 for deposit into the Hawaii Strategic Development Corporation Revolving Fund; and

(3)  Making an appropriation of $1,000,000 for fiscal year 2017-2018 out of the Hawaii Strategic Development Corporation Revolving Fund for the HI Growth Initiative.

Your Committee intends this means of providing $1,000,000 for the HI Growth Initiative to be cost neutral for the financial plan.

     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. 761, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 761, S.D. 2.

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

________________________________

JILL N. TOKUDA, Chair