Report Title:

PART I

SECTION 1. The legislature finds that to be successful in the twenty—first century global economy, Hawaii must position itself as a leader in technology development, transfer, and commercialization. Significant progress has been made in past years through programs supported by federal and state initiatives, such as programs administered by the Hawaii technology development corporation, Hawaii strategic development corporation, and the Hawaii technology development venture. However, the legislature believes that additional efforts are required to move Hawaii's technology industry to achieve local technology commercialization. Innovation in science and technology fields will not only enable the State to succeed in the global marketplace, but will also support the State's sustainable economic development goals to include a viable and vibrant technology and manufacturing labor force.

The purpose of this Act is to establish the Hawaii innovation and technology research corporation to:

(1) Promote, develop, and expand Hawaii's innovation and technology industry;

(2) Promote a more diverse economy that offers high quality, knowledge—based jobs; and

(3) Develop policy and resource allocations to enable and support start—up companies, sustain existing companies, and attract companies to relocate or establish offices in Hawaii.

PART II

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII INNOVATION AND TECHNOLOGY RESEARCH CORPORATION

§ -1 Hawaii innovation and technology research corporation; establishment; purpose. (a) There is established, as a body corporate, the Hawaii innovation and technology research corporation. The Hawaii innovation and technology research corporation shall be a public instrumentality of the State and shall be placed within the department of business, economic development, and tourism for administrative purposes only pursuant to section 26-35.

(b) The purpose of the Hawaii innovation and technology research corporation shall be to promote, develop, and expand Hawaii's innovation and technology industry by:

(1) Encouraging, initiating, and aiding in the development and commercialization of local innovation and technology;

(2) Furnishing the means and methods to institute and grow local innovation and technology;

(3) Developing policy and resource allocations to enable and support start-up companies, sustain existing companies, and attract companies to relocate or establish offices in Hawaii;

(4) Attracting resources from public and private sector organizations and agencies to develop a local qualified innovation research and technology workforce;

(5) Coordinating with other state agencies and entities to support the innovation and technology industry;

(6) Collecting and analyzing information on the state of local and global technology activity; and

(7) Taking any and all other actions reasonably designed to promote the purposes of the research corporation in the interest of promoting the general welfare of the people of the State.

§ -2 Hawaii innovation and technology research corporation; board; executive director. (a) The Hawaii innovation and technology research corporation shall be headed by a policy—making board of directors.

All board members shall have knowledge, experience, and expertise in the field of technology, innovation, information systems, computer science, aerospace, agriculture, tourism, environmental science, or sustainability. The governor shall ensure the fulfillment of all requirements of this subsection. If any nominee submitted pursuant to subsection (b) does not fulfill the requirements of this subsection, the governor shall notify the president of the senate, the speaker of the house of representatives, or the president of the University of Hawaii, as appropriate, of the unmet requirements.

Board members shall serve for four-year terms, and no board member shall serve for longer than eight consecutive years; provided that each member shall hold office until the member's successor is appointed and qualified.

(b) The board of directors shall consist of the following individuals:

(1) Four members shall be appointed by the governor;

(2) Two members shall be appointed by the governor from a list of nominees from the president of the senate;

(3) Two members shall be appointed by the governor from a list of nominees from the speaker of the house of representatives; and

(4) One member shall be appointed by the governor from a list of nominees from the president of the University of Hawaii.

(d) A majority of the board members shall constitute a quorum and an affirmative vote by a majority of the quorum shall be necessary for all actions by the Hawaii innovation and technology research corporation. The members shall serve without compensation, but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties, by the department of business, economic development, and tourism.

(e) The board shall appoint one person to serve as executive director, who shall oversee the Hawaii innovation and technology research corporation staff. The board shall set the duties and responsibilities of the executive director. Salaries for the executive director and staff shall be appropriated by the legislature.

§ -3 Hawaii innovation and technology research corporation; powers. The Hawaii innovation and technology research corporation, under the direction of the board of directors, shall have the following general powers:

(1) To adopt, amend, and repeal bylaws governing the conduct of its business and the exercise of the powers and performance of duties granted to or imposed upon it by law;

(2) To sell, lease, rent, hold, maintain, use, and operate any real, personal, or mixed, tangible or intangible, property in accordance with the conditions under which it was received;

(3) To enter into and perform such contracts, leases, cooperative agreements, or other transactions with any other agency or political subdivision of the State; or any private person, firm, partnership, association, company, or corporation as it may be necessary in the conduct of its business and on terms as it may deem appropriate; provided that the research corporation shall not obligate any funds of the State except those that have been appropriated to it. Notwithstanding the foregoing, the research corporation may enter into and perform contracts, leases, cooperative agreements, or other transactions with any agency or instrumentality of the United States, a foreign nation, a state, a territory, or a possession, or with any political subdivision thereof on behalf of another agency of the State, whenever the donating or granting agency or instrumentality determines that the agency of the State lacks the capacity to be effective and efficient in accomplishing the purposes for which the contracts, leases, cooperative agreements, or other transactions are being entered into; provided that the research corporation shall not obligate any funds of the State except those that have been appropriated to the research corporation;

(4) To receive by gifts, grants, devises, bequests, or otherwise from private sources only, any property, real, personal, or mixed, intangible or tangible, absolutely or in trust, to be used and disposed of, either the principal or the income therefrom, in accordance with the conditions under which it was received; provided that no gift to the research corporation shall be accepted unless approved or confirmed by the board of directors. Notwithstanding the foregoing, the research corporation may receive gifts, grants, or awards from any agency or instrumentality of the United States, a foreign nation, a state, a territory, or a possession, or from any political subdivision thereof on behalf of another agency of the State, whenever the donating or granting agency or instrumentality determines that the agency of the State lacks the capacity to be effective and efficient in accomplishing the purposes for which the gifts, grants, or awards are being made; provided that no gift to the research corporation shall be accepted unless approved or confirmed by the board of directors;

(5) To serve as trustee or beneficiary under terms of any gift, indenture, or will;

(6) To coordinate and correlate activities and projects of the research corporation with the work of other state agencies for the purpose of economic development of the State whenever practical or desirable;

(7) To support industry-focused events in fields, including but not limited to aerospace, energy, healthcare, and consumer products, whereby collaboration can be facilitated that enables Hawaii-based technology companies to access national and global markets. Support may include but is not limited to travel and coordination, introductions and follow-up communications, developing and maintaining a database of companies, individuals, collaborators, candidates, and graduates from science, technology, engineering, and math fields with connections or ties to Hawaii, including coordination with Hawaii high schools and Hawaii universities; and

(8) To do any or all other acts reasonably necessary to carry out the objectives and purposes of the research corporation."

PART III

SECTION 3. Section 26-18, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The following are placed in the department of business, economic development, and tourism for administrative purposes as defined by section 26-35: Hawaii community development authority, Hawaii housing finance and development corporation, Hawaii innovation and technology [~~development~~] research corporation, land use commission, natural energy laboratory of Hawaii authority, and any other boards and commissions as shall be provided by law."

SECTION 4. Section 171-64.7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) This section applies to all lands or interest therein owned or under the control of state departments and agencies classed as government or crown lands previous to August 15, 1895, or acquired or reserved by the government upon or subsequent to that date by purchase, exchange, escheat, or the exercise of the right of eminent domain, or any other manner, including accreted lands not otherwise awarded, submerged lands, and lands beneath tidal waters that are suitable for reclamation, together with reclaimed lands that have been given the status of public lands under this chapter, including:

(1) Land set aside pursuant to law for the use of the United States;

(2) Land to which the United States relinquished the absolute fee and ownership under section 91 of the Organic Act prior to the admission of Hawaii as a state of the United States;

(3) Land to which the University of Hawaii holds title;

(4) Land to which the Hawaii housing finance and development corporation in its corporate capacity holds title;

(5) Land to which the department of agriculture holds title by way of foreclosure, voluntary surrender, or otherwise, to recover moneys loaned or to recover debts otherwise owed the department under chapter 167;

(6) Land that is set aside by the governor to the Aloha Tower development corporation; or land to which the Aloha Tower development corporation holds title in its corporate capacity;

(7) Land that is set aside by the governor to the agribusiness development corporation; or land to which the agribusiness development corporation in its corporate capacity holds title; and

(8) Land to which the Hawaii innovation and technology [~~development~~] research corporation in its corporate capacity holds title."

SECTION 5. Section 210-7, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Subject to the availability of funds, a request from the Hawaii innovation and technology [~~development~~] research corporation for a transfer of funds to supplement appropriations for small business innovation research grants shall be granted expeditiously. If available funds are inadequate for a transfer to the [~~development~~] research corporation, the director shall advise the [~~development~~] research corporation that a transfer will be made when sufficient funds are available in the Hawaii capital loan revolving fund."

SECTION 6. Section 227D-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The governing body of the authority shall consist of a board of directors having thirteen voting members. Three members from the general public shall be appointed by the governor for staggered terms pursuant to section 26-34, except that one of these members shall be a resident of the county of Hawaii. The members shall be selected on the basis of their knowledge, interest, and proven expertise in, but not limited to, one or more of the following fields: finance, commerce and trade, corporate management, marketing, economics, engineering, energy management, real estate development, property management, aquaculture, and ocean science. The chairperson and secretary of the research advisory committee shall serve on the board. The director of business, economic development, and tourism, the chairperson of the board of land and natural resources, the president of the University of Hawaii, the mayor of the county of Hawaii, [~~an appointed member from the board of the Hawaii technology development corporation,~~] and an appointed member from the board of the Hawaii [~~strategic development~~] innovation and research corporation, or their designated representatives, shall serve as ex officio, voting members of the board. The tenants of the authority shall elect two members to the board from among the tenants of the authority, of which one member shall serve a two-year term, and one member shall serve a four-year term. In electing the tenant members, each tenant shall be entitled to cast one vote for each member position. The tenant members shall be recused from voting on setting lease rents, water rates, or utility rates, but may participate in discussions. The director of business, economic development, and tourism shall serve as the chairperson until such time as a chairperson is elected by the board from the membership. The board shall elect other officers as it deems necessary."

SECTION 7. Section 304A-1959, Hawaii Revised Statutes, is amended to read as follows:

"[[]§304A-1959[]] Biennial report. No later than twenty days prior to the convening of the regular session of each odd-numbered year, the University of Hawaii shall submit a report to the legislature concerning:

(1) All funds deposited into the university innovation and commercialization initiative special fund and a detailed description of the use of those funds; and

(2) Coordinated efforts between the innovation and commercialization initiative program and other state agencies, including the [[]Hawaii[]] innovation and technology [~~development~~] research corporation[~~, the Hawaii strategic development corporation,~~] and the Hawaii state energy office, to move the State's innovation goals forward, and to more efficiently and effectively utilize resources to achieve these outcomes.

SECTION 8. Section 304A-3101, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The center shall assist the State's Hawaii innovation and technology [~~development~~] research corporation in its efforts, shall promote educational, scientific, technological, and literary pursuits in the area of high technology, and shall provide support for the high technology industry in Hawaii in the following manner:

(1) By fostering scientific and technological interchange between students and scholars of the United States and other nations;

(2) By encouraging, initiating, aiding, developing, and conducting scientific investigations and research in high technology;

(3) By encouraging and aiding in the education and training of persons from the United States and other nations for the conduct of such investigations, research, and study;

(4) By assisting in the dissemination of knowledge by establishing, aiding, and maintaining professorships or other staff positions, fellowships, scholarships, publications, and lectures;

(5) By other means to make the benefits of investigations, research, and study available to the public; and

(6) By any and all other acts reasonably designed to further the above purposes in the interest of promoting the general welfare of the people of the State and the mutual understanding between the United States and other nations."

SECTION 9. Section 394-8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The department shall utilize the resources of the University of Hawaii, including the community college system, the Hawaii innovation and technology [~~development~~] research corporation, and other educational and training resources in the public and private sectors throughout the State as may be appropriate to be used to provide preemployment or employment training or on-the-job training for local residents hired by businesses relocating to Hawaii or expanding their local operations. Training may include, but not be limited to, training in entrepreneurship, capital formation, start-up, and business plans. The department may contract for these training needs from public agencies including the various University of Hawaii campuses, private educational institutions, nonprofit corporations, or private entities in order to provide the required training."

PART IV

SECTION 10. Chapter 206M, Hawaii Revised Statutes, is repealed.

SECTION 11. All rights, powers, functions, and duties of the Hawaii technology development corporation are transferred to the Hawaii innovation and technology research corporation.

All employees who occupy civil service positions and whose functions are transferred to the Hawaii innovation and technology research corporation by this Act shall retain their civil service status, whether permanent or temporary. Employees shall be transferred without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The president and chief executive officer may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

SECTION 12. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii technology development corporation relating to the functions transferred to the Hawaii innovation and technology research corporation shall be transferred with the functions to which they relate.

SECTION 13. All rules, policies, procedures, guidelines, and other materials adopted or developed by the Hawaii technology development corporation to implement provisions of the Hawaii Revised Statutes which are made applicable to the Hawaii innovation and technology research corporation by this Act, shall remain in full force and effect until amended or repealed by the department of business, economic development and tourism pursuant to chapter 91, Hawaii Revised Statutes. In the interim, every reference to Hawaii technology development corporation in those rules, policies, procedures, guidelines, and other material is amended to refer to the Hawaii innovation and technology research corporation as appropriate.

SECTION 14. All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the Hawaii technology development corporation pursuant to the provisions of the Hawaii Revised Statutes, which are made applicable to the Hawaii innovation and technology research corporation by this Act, shall remain in full force and effect. Upon the effective date of this Act, every reference to the Hawaii technology development corporation therein shall be construed as a reference to the Hawaii innovation and technology research corporation as appropriate.

PART V

SECTION 15. Chapter 211F, Hawaii Revised Statutes, is repealed.

SECTION 16. All rights, powers, functions, and duties of the Hawaii strategic development corporation are transferred to the Hawaii innovation and technology research corporation.

SECTION 17. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii strategic development corporation relating to the functions transferred to the Hawaii innovation and technology research corporation shall be transferred with the functions to which they relate.

SECTION 18. All rules, policies, procedures, guidelines, and other materials adopted or developed by the Hawaii strategic development corporation to implement provisions of the Hawaii Revised Statutes which are made applicable to the Hawaii innovation and technology research corporation by this Act, shall remain in full force and effect until amended or repealed by the department of business, economic development and tourism pursuant to chapter 91, Hawaii Revised Statutes. In the interim, every reference to Hawaii strategic development corporation in those rules, policies, procedures, guidelines, and other material is amended to refer to the Hawaii innovation and technology research corporation as appropriate.

SECTION 19. All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the Hawaii strategic development corporation pursuant to the provisions of the Hawaii Revised Statutes, which are made applicable to the Hawaii innovation and technology research corporation by this Act, shall remain in full force and effect. Upon the effective date of this Act, every reference to the Hawaii strategic development corporation therein shall be construed as a reference to the Hawaii innovation and technology research corporation as appropriate.

PART VI

SECTION 20. Act 49, Session Laws of Hawaii 2017, is amended by amending section 3, Item A-19 to read as follows:

"19. BED143 - [~~HIGH~~] HAWAII TECHNOLOGY DEVELOPMENT CORPORATION

1.50* 1.50*

3.75# 3.75#

OPERATING BED 4,085,439A 1,085,439A

1.50* [1.50*]

0.0*

6.25# [~~6.25#~~]

0.0#

BED 3,858,345B [~~3,898,345B~~]

BED 1,500,000W 1,500,000W

9.00# 9.00#

BED 964,713P 964,713P"

SECTION 21. There is appropriated out of the general revenues of the State of Hawaii the sum of $370,410 or so much thereof as may be necessary for fiscal year 2018-2019 for personal services to convert 1.50 permanent positions and 6.25 temporary positions in the Hawaii technology development corporation (BED143/TE) from special funds to general funds.

The sum appropriated shall be expended by the Hawaii technology development corporation for the purposes of this part.

SECTION 22. There is appropriated out of the general revenues of the State of Hawaii the sum of $123,446 or so much thereof as may be necessary for fiscal year 2018-2019 for other current expenses for the Hawaii technology development corporation (BED143/TE).

The sum appropriated shall be expended by the Hawaii technology development corporation for the purposes of this part.

SECTION 23. Any unencumbered balances remaining in the technology special fund shall lapse to the credit of the general fund.

PART VII

SECTION 24. 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 that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 25. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 26. This Act shall take effect on July 1, 2020; provided that part VI shall take effect on July 1, 2018.

THE SENATE	S.B. NO.	48
TWENTY-NINTH LEGISLATURE, 2017		S.D. 3
STATE OF HAWAII		H.D. 2
		PROPOSED